• Adweek, Thursday, November 1, 2007 12 PM

Interpublic was back in the hole in the third quarter as higher costs drove the troubled advertsing and marketing services into the red. The company said it lost $21.9 million in the period even as revenue rose 7%. That is a sharp turn from the third quarter of 2006, when it reported a modest profit of $3.7 million. Salary and related expenses at the company jumped about 8%, to $1.03 billion -- but despite the overall loss, "organic" revenue - which knocks out the impact of acquisitions, divestitures and foreign currency benefits -- grew 5.7T on the back of higher spending by existing clients and the addition of new ones.

"The increasingly competitive client offerings at all of our companies give us confidence in our future growth prospects," says CEO Michael Roth. "We will continue to push for double digit margins, but we expect to post [an] operating margin of between 8.5% and 9% in 2008 -- a dramatic improvement over the negative 1.7% percent the company reported less than two years ago."

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