IPG Stock Surges On Strong Q4, Full-Year Report

Interpublic Group reported strong Q4 and full-year 2019 results early Wednesday, driving its stock price up 5% in morning trading.

The company posted a fourth quarter revenue gain of 1.6% to $2.9 billion versus the prior year period with an organic revenue increase of 2.9%. Net income available to IPG shareholders was roughly flat at $328.9 million.

For full-year 2019 revenue was up 5.2% to $10.2 billion with organic growth (which strips out foreign exchange and M&A impact) of 3.3%, exceeding its target of 3%.

By comparison, Omnicom reported full-year 2019 organic growth of 2.8% earlier this week. Last week Publicis Groupe reported an expected organic revenue decline of 2.3% for the year.

Results for Acxiom are included in the IPG results for the first time since the company closed its acquisition of the data management giant in October of 2018.



IPG said it has targeted 3% organic growth for 2020. It also announced a 9% dividend increase and said it was evaluating a share buyback program which could start as early as next year, CEO Michael Roth told analysts on a Wednesday morning call.

“We are very pleased to report strong performance for both the quarter and full year,” Roth said on the call.  

“At the top of our financial highlights, net revenue organic growth was 2.9% in the fourth quarter, which builds on a challenging 7.1% comp in the fourth quarter of 2018.” The firm’s full-year growth, he added, “again places us at the forefront of our industry.” He also noted that the growth was achieved despite headwinds from client losses, which continue into the first half of 2020.

Regionally, Q4 organic growth in the U.S. was 2.1%, which is on top of the 6.3% growth in the region a year ago. International organic growth was 4.1% which was achieved on top of 8.0% growth a year ago. Growth was achieved across the globe with the exception of Asia Pacific region.

Addressing the health crisis in China, Roth noted that “we are focused on the well-being and safety of our own people, as we have about 2,500 employees in Greater China, and thousands more partners, clients and suppliers.”  The country accounts for about 2% of IPG revenue. Most IPG staffers there are currently working from home, and are subject to travel restrictions. “We have technology in place that makes it easier for our people to work remotely. We are closely monitoring the situation.”

Roth said the holding company’s growth was led by media, data and tech. “For the year, it is worth noting that every client sector grew, other than auto,” where the company lost both Chrysler and Volkswagen in 2018.

Roth said the tone of business “appears sound as we enter the new year.”

Asked about Acxiom, Roth said its integration into IPG is “pretty much done.” Given some confusion on the issue, he noted that about two-thirds of Acxiom’s business is managing first-party data. That’s “the true core,” he said, although it also has a third-party data management offering.  And he stressed, while many competing firms use Acxiom services, no clients have raised conflict of interest issues.

As to the phase out of behavior-tracking cookies Roth said the company has been preparing plans for that eventuality for a while and was “one of the reason’s we bought Acxiom.”


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