NYSE$IPG

Interpublic Group of Companies Inc · Q4 2019 earnings

Q4 2019 earnings · · Investor relations

Briefing

Reported strong results for the quarter and full year, with organic revenue growth leading the sector and adjusted EBITA margin expansion.

Interpublic Group reported strong Q4 and full-year 2019 results. Q4 organic growth was 2.9%, and adjusted EBITA margin was 21.1%. The company is targeting 3% organic growth and further EBITA margin expansion in 2020.

  • Fourth-quarter organic growth was 2.9%, on top of strong growth a year ago.
  • U.S. organic growth was 2.1% and international organic growth was 4.1%.
  • Q4 EBITA was $513 million and EBITA margin on net revenue was 21.1%.
  • Adjusted diluted earnings per share for the quarter was $0.88.

Headline financials

Total Revenue

$2.9B

Previous: $2.86B+1.6%
EPS (adj)

$0.88

Previous: $0.89-1.1%
Organic Net Revenue Growth

2.9%

No prior period
Adjusted EBITA Margin

21.1%

No prior period
Capital Expenditures

$64.7M

Previous: $71.4M-9.4%
Free Cash Flow

$1.04B

Previous: $820M+26.9%
Net Income

$329M

Previous: $326M+0.8%
Operating Income

$491M

Previous: $459M+7.0%
Gross Profit

$2.9B

Previous: $609M+376.5%
Cash & Equivalents

$1.2B

Previous: $673M+78.2%
Total Assets

$3.3B

Previous: $15.6B-78.9%
Stock-Based Comp

$21.9M

Previous: $22.5M-2.7%

Revenue & EPS history

Interpublic Group · Revenue · Quarterly

$2.9B

Q4 2019+1.6%vs Q4 2018
Beat estimate in 11 of 16 quarters(69%)
ActualEstimate

Forward guidance

The company is targeting organic revenue growth of 3% and EBITA margin expansion to 14.2% in 2020.

Tailwinds

  • The tone of the business remains sound.
  • New business activity is solid.
  • The breadth and strength of our portfolio positions us well to grow with our existing clients.
  • Our hard work to create a modern, highly-collaborative Company ensures that we are positioned to profit from opportunities that may come from outside of our traditional arena going forward.
  • There remains significant potential for value creation and enhanced shareholder value over the long term for our Company.

Headwinds

  • We continue to have very difficult comps year-on-year.
  • We still have headwinds in the first half of 2020.
  • There are wildcards out there, including the coronavirus.
  • The impact of the coronavirus on our suppliers and the supply chain and what impact that would have on U.S. companies and other global companies remains to be seen.
  • Project business that Hill Holliday had with Bank of America should tail off in the second part or half of the year

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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