• by Steve McClellan  @mp_mcclellan, July 21, 2016

Interpublic Group shares were down 5% in mid-morning trading to $23.02 after the firm issued second-quarter results that were below consensus Wall Street expectations.

But some analysts suggested that the selloff was more about Wall Street’s short-term view and not an accurate indicator of the company’s performance.

Brian Wieser, senior analyst at Pivotal Research, issued a note stating: “Overall, negative reaction from investors to the quarter’s results aren’t particularly warranted given the lack of meaningful change to the current year and long-term outlook for the business. However, the decline in the stock this morning provides enough upside between current trading levels and our $27 price target to maintain our Buy rating.”

IPG reported that second-quarter revenue was up 2.2% to $1.92 billion and that net income available to IPG common shareholders was up 29% to $156.9 million.

First-half revenue was up 3% to $3.66 billion and net income was up 36% to $162.3 million.

Organic revenue growth (which excludes acquisitions, divestitures and currency fluctuations) was 3.7% for the second quarter and 5.1% for the first half of the year. By comparison, earlier in the day Publicis Groupe reported 2.7% organic growth for the second quarter and 2.8% growth for the first half of the year. Last week, Omnicom Group reported second-quarter organic growth of 3.4% and first-half growth of 3.6%.

On a Thursday morning call with analysts to discuss results, IPG CEO Michael Roth said: “We continue to believe that we will deliver on the high end of our full-year target of organic revenue of 3% to 4%.”

In the U.S. -- which accounts for 62% of IPG’s business -- second-quarter organic growth was 4.6%, led by a range of agencies and disciplines, including R/GA and Huge, as well as McCann, MullenLowe, Mediabrands and Weber Shandwick.

In the U.K., organic growth was 1.2%, which reflected growth at McCann, R/GA and Weber Shandwick. CFO Frank Mergenthaler said the U.K.’s decision to leave the European Union didn’t appear to have a material impact on the company’s results there. “Our U.K. operators are not citing any specific impact on client spending during the quarter related to the run-up to the vote on Brexit,” he said.

In Continental Europe, organic growth was 0.5%, with the firm continuing to see mixed performance including organic increases in Italy and Spain, offset by decreases in Germany and France. For the first six months, organic growth was 1.1%.

“As expected, organic growth in the second quarter showed some moderation from our very strong first-quarter increase,” said Roth. “Within the quarter, we saw growth in June that was at a lower rate than in April and May. It bears noting that this was in part due to the timing of revenue related to a couple of the new business wins that we added in 2015.”

Roth added that some work that the company expected to execute in the second quarter was delayed by clients until later in the year.  But, he added, “Based on client work already underway, we are confident that we will realize this revenue during this year’s second half.”

Commenting on the ANA transparency report, Roth commented that the company has “consistently” handled relationships with advertisers “in a highly proactive and transparent manner. As such, our conversations with clients relating to the report and the practices it alleges have been constructive. We continue to encourage dialogue on these matters and we stand behind our record of transparency, in our contracts, as well as our dealings with clients and media vendors.”

Roth added that “IPG’s performance in this regard has been consistently validated by a range of third-party experts employed by our clients.” He said the holding company continues to stand firm behind its policy of not being a reseller of media to advertisers, given its belief that agencies should be “agnostic” advisors to clients. “We see it as a differentiator,” he said.

Mergenthaler did note that there is some “pass through” revenue via some events and projects divisions at the company. But those pass through dollars are not media related and the company has been gradually phasing out that activity for several years.