NYSE$IPG

Interpublic Group of Companies Inc · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Interpublic Group's Q3 2020 results were announced, revealing a decrease in net revenue but an increase in adjusted EBITA margin.

Interpublic Group reported a decrease in net revenue for Q3 2020, with organic net revenue also declining due to the COVID-19 pandemic's macroeconomic impact. However, the company's adjusted EBITA margin increased, reflecting effective cost management.

  • Third quarter net revenue was $1.95 billion, a 5.2% decrease year-over-year.
  • Organic net revenue decreased by 3.7% due to COVID-19 macroeconomic disruption.
  • Net income for the third quarter was $279.7 million, including restructuring charges.
  • Adjusted EBITA margin was 16.2% before restructuring charges.

Headline financials

Total Revenue

$2.13B

Previous: $2.44B-12.8%
EPS (adj)

$0.53

Previous: $0.49+8.2%
Organic Net Revenue Growth

-3.7%

No prior period
Adjusted EBITA Margin

16.2%

Previous: 14.7%+10.2%
Capital Expenditures

-$40.1M

Previous: -$53.7M+25.3%
Free Cash Flow

$285M

Previous: $370M-23.0%
Net Income

$280M

Previous: $166M+68.9%
Operating Income

$249M

Previous: $280M-11.3%
Gross Profit

$377M

Previous: $359M+4.9%
Cash & Equivalents

$1.63B

Previous: $521M+212.8%
Total Assets

$16.1B

Previous: $16B+0.5%
Stock-Based Comp

$20.6M

Previous: $14.2M+45.1%

Revenue & EPS history

Interpublic Group · Revenue · Quarterly

$2.13B

Q3 2020-12.8%vs Q3 2019
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Forward guidance

The company expects visibility to remain unclear for as long as COVID-19 is disrupting everyday life and macroeconomic conditions. They will be disciplined in how they manage the business, aligning expenses closely to any changes in revenue and look forward to returning to their strong trajectory of organic revenue and profit growth as a macro recovery takes hold.

Tailwinds

  • Management will be disciplined in how they manage the business.
  • Expenses will be closely aligned to any changes in revenue.
  • Looking forward to returning to their strong trajectory of organic revenue and profit growth as a macro recovery takes hold.
  • Company is thankful for the continued close partnership with clients.
  • Proud of employees around the world for their outstanding work and productivity despite all the challenges brought by the pandemic.

Headwinds

  • Visibility remains unclear for as long as COVID-19 is disrupting everyday life.
  • Visibility remains unclear for as long as macroeconomic conditions are uncertain.
  • Unquestionably, there will be enduring consumer changes because of the pandemic, including the mass shift to ecommerce.
  • Unquestionably, there will be enduring consumer changes because of the emergence of digital consumer experience.
  • Unquestionably, there will be enduring consumer changes because of a deeper accountability for brand authenticity and purpose.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 15 quarterly earnings reports

Historical avg

+1.0%

Avg return

Earnings day

-1.2%

Avg return

5 days after

-0.8%

Avg return

30 days after

55%

37 / 67 earnings

Positive

+13.6%

Q4 2010

Best reaction

-18.9%

Q2 2011

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q3 2025-2.0%-2.7%
Q2 2025+6.9%+8.5%+10.4%
Q1 2025+4.5%+4.3%+0.2%
Q4 2024-1.4%-0.4%-2.7%
Q3 2024-5.0%-5.4%-7.7%
Q2 2024+1.1%+5.0%+8.3%
Q1 2024+0.5%+1.4%+1.3%
Q4 2023-4.5%-1.6%+0.0%
Q3 2023-1.2%-2.9%+6.3%
Q2 2023-14.0%-13.5%-14.8%
Q1 2023-2.2%-2.5%+3.2%
Q4 2022-2.7%-1.5%-11.5%
Q3 2022+3.6%+7.2%+17.6%
Q2 2022-1.5%-4.1%+0.8%
Q1 2022-4.1%-2.3%-7.0%
Q4 2021-11.4%-8.0%-16.4%
Q3 2021-2.8%
Q2 2021+9.1%
Q1 2021+7.4%
Q4 2020-6.9%
Q3 2020+6.4%
Q2 2020+0.0%
Q1 2020+4.8%
Q4 2019+7.8%
Q3 2019+2.9%
Q2 2019-0.0%
Q1 2019+5.5%
Q4 2018+6.3%
Q3 2018+8.7%
Q2 2018+1.9%
Q1 2018-3.7%
Q4 2017+12.8%
Q3 2017-5.5%
Q2 2017-16.2%
Q1 2017-2.1%
Q4 2016+6.3%
Q3 2016+1.6%
Q2 2016-4.5%
Q1 2016+0.0%
Q4 2015+1.7%
Q3 2015+3.7%
Q2 2015+4.9%
Q1 2015-1.7%
Q4 2014+5.6%
Q3 2014+4.0%
Q2 2014+3.8%
Q1 2014+3.3%
Q4 2013-4.1%
Q3 2013-6.3%
Q2 2013-0.9%
Q1 2013+5.0%
Q4 2012+0.7%
Q3 2012-4.3%
Q2 2012-7.9%
Q1 2012+5.6%
Q4 2011+8.2%
Q3 2011+6.3%
Q2 2011-18.9%
Q1 2010-5.4%
Q1 2011+1.9%
Q4 2010+13.6%
Q4 2008+13.6%
Q3 2009-2.1%
Q3 2010-2.1%
Q2 2010+10.8%
Q4 2009+10.8%
Q2 2009+10.8%

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