Publicis Reports October Upswing, Cautious About Market Outlook

by Steve McClellan, Nov 12, 2012, 12:01 PM

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Following a dismal September, which the holding company described as the worst month of the third quarter, Publicis Groupe issued a brief update for its October performance, reporting that organic revenue growth for the period was up more than 7%. 

That represented a rebound of sorts for the holding company, which showed an organic revenue decline in September and just 2% organic growth for the third quarter.

The tepid third-quarter performance took investors by surprise; Publicis Groupe shares took an immediate 2.5% hit after disclosing those results. “After the brutal and unexpected decline of advertising spending in September the Publicis Groupe's organic growth of October revenues is above 7%,” stated company CEO Maurice Levy.

It’s unusual for holding companies to provide monthly financial performance updates — although Tokyo-based Dentsu provides ad spending figures for the company on a monthly basis. But given the unexpected weak results for the third quarter and the sharp month-to-month improvement from September to October, as well as the uncertain economy, it’s not surprising Publicis would want to provide some good news to investors.

Levy said the October upswing was driven by the U.S. region, as well as faster-growing developing markets and digital accounts.  “Europe and analog media remain at worrying levels,” Levy stated. “While the October numbers are extremely good, we should remain cautious. Fourth quarter is always uncertain, particularly December. We will continue to aggressively pursue our strategy on our two growth pillars: digital and fast-growing markets.”

Levy’s comments helped give the company’s stock lift of more than 2% in trading on Monday.

Meanwhile, Dentsu reported that ad spending for the month of October was down 7% versus the prior year period. A company spokesman stated: “Although ad spend in October was up in 7 categories out of 20, including Automobile,  Apparel, personal items and food services, industry sectors such as Information/Communications, Beverages/Cigarettes and Cosmetics/Toiletries, which account for a large percentage of total net sales, registered declines.”

Last week, when it disclosed first-half-year earnings results, Dentsu reported that it was seeing weakening demand  for advertising in the second half of its fiscal year, which ends March 31.

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