Omnicom Shares Slide In Response To Full-Year Results

Omnicom Group shares were down more than 2% in mid-morning Tuesday trading after the holding company issued year-end results and reported a 2.2% dip in fourth-quarter revenue.

WPP and Publicis were also down, while Interpublic was up about 1%.

By contrast, the Dow Jones jumped 200 points in reaction to the tentative deal to avoid another federal government shutdown.

For the year, Omnicom posted organic growth of 3.2%, which was in line with company projections. U.S. growth for the year was a tepid 0.7% although the group rebounded in the fourth quarter — posting 2.6% growth in the region, which executives attributed to a strong flow of project work, which can be hit or miss depending on the year.

Omnicom posted some big wins in the fourth quarter — including the creative accounts for Ford and U.S. Army and the impact of those new client revenues that will kick in sometime late in the second quarter of this year, according to Omnicom CEO John Wren.



Net new business in the fourth quarter was $1.1 billion.

On a call with analysts and investors, Wren characterized 2018 as “another year of solid financial results” for the company. He said the organic growth outlook for 2019 currently is between 2% and 3%, similar to 2018. But he added that the firm is still finalizing 2019 growth plans, a process that should be completed in the next couple of weeks.

“We don’t have the best visibility yet,” added Phil Angelastro, the company’s chief financial officer.

The company saw some growth in all of its global regions. Among its business segments, only a portion of its CRM business, as expected, saw negative growth. The company continues to review its portfolio with an eye toward disposing of non-strategic assets.

Wren told analysts that client outlook is similar to where it has been the past couple of years, neither overly rosy nor gloomy. “There’s no sense of fear” about the current economic climate, he said. But “it’s not everything is fine,” either.

Asked to comment on struggling competitors like WPP and Publicis, Wren said he wasn’t thrilled about that because “wounded competitors” tend to “do things they wouldn’t ordinarily do” to gain business.

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