IPG also announced that it will likely file its 2004 annual report late, and that its creditors extended the termination date for certain lending agreements. IPG has been plagued by ongoing accounting problems and is reviewing its internal control systems.
IPG shares dropped 43 cents, or 3.4 percent, to $12.26 following the announcements. The group said its trends analysis "currently indicated a likely moderate drop in revenue in the first quarter of 2005 compared to 2004, and higher operating expenses in the quarter than in the same period last year."
IPG said it has a tentative agreement in place for a new chief financial officer to replace Thompson. The new executive, whose name can't yet be revealed, is expected to take over in the second half of July.
The news suggests a murky outlook for IPG in the latter half of this year, according to the reaction of some on Wall Street.
"At this point, IPG sees a 'moderate drop' in its first quarter revenues, while operating costs were higher on a comparable basis," said a statement from Lauren Rich-Fine, a Merrill Lynch analyst. "As we were more positively surprised by the revenue momentum in the second half of 2004, the first-quarter trends seem to be closer to our sense of reality after IPG's client losses in the second half of 2004. As IPG cycles through these losses and new losses in the first half of 2005 (e.g. GM media buying in the U.S.), this would seem to suggest revenue declines for most of the rest of the year, although we note that IPG did notch some notable wins (e.g. Intel). Given that IPG's quarterly revenue trends have been tricky to explain, it is difficult to tell whether revenue declines would continue for the rest of the year."
As for the interim, Thompson will work with Michael Roth, IPG's chairman and CEO, on managing the company's finance functions until the new CFO has been transitioned, an IPG representative said.
"Bob and I have independently come to the conclusion that the next steps in our company's progress will require new financial leadership," said Roth. "Bob came to me late last week to indicate his desire to leave. Separately, the company had begun the process of seeking new financial leadership and we have reached tentative agreement with an external candidate who we look forward to having join us in early August. That person has experience in senior finance roles in related industries. I look forward to having him as my new partner. The strong management teams at a number of our agencies, together with new players recently put into place at Lowe, FCB and Interpublic media, lead me to believe that we can succeed in getting Interpublic back on track."