NEW YORK—Omnicom Group, parent of international public relations brands Fleishman-Hillard, Ketchum, Porter Novelli and Brodeur Pleon, reported net income for the third quarter of 2007 up 14.2 percent to $202.2 million (from $177.1 million in the third quarter of 2006) and diluted earnings per share in the third quarter of 2007, up 19.2 percent to $0.62 per share.
Worldwide revenue increased 11.8 percent to $3,101.4 million. Domestic revenue for the third quarter increased 7.4 percent to $1,654.9 million while international revenue increased an impressive 17.2 percent to $1,446.5 million. Worldwide revenue for the nine months ended September 30 is up 11.1 percent to $9,068.1 million.
The public relations operations continue to perform well, accounting for 10.2 percent of the group’s third quarter revenue ($317.8 million) and 10.3 percent of its year-to-date revenue ($933.7 million) with year-to-date growth of 11.7 percent.
The solid numbers were not enough, however, to prevent a decline in the company’s share price, which fell 4.3 percent as investors expressed concern about the impact of the housing crisis and rising oil prices on the long-term economic outlook, despite the fact that Omnicom chief financial officer Randall Weisenburger said marketing spending appeared to be holding steady, telling analysts: "We haven’t really heard anything from clients other than general market concerns.”
Omnicom’s results came a week after WPP—parent of global public relations brands Burson-Marsteller, Hill & Knowlton, Ogilvy Public Relations Worldwide, Cohn & Wolfe and GCI Group—reported third-quarter revenues up by 4.9 percent to £1.480 billion ($3.036 million), with constant currency growth of 8.1 percent. On a like-for-like basis, excluding the impact of acquisitions and currency fluctuations, revenue growth was almost 5 percent, continuing the trend seen in the first half of the year.
Branding and identity, healthcare and specialist communications showed the strongest growth, with revenues up over 16 percent, followed by public relations and public affairs, up almost 11 percent for the quarter. Year-to-date, constant currency revenues in public relations and public affairs are up by more than 13 percent.
But WPP chief executive Martin Sorrell caused concern with his comments about the long-term outlook, warning that 2009 could be a difficult year if a new U.S. administration takes painful steps to correct “economic imbalances” early in its term. He also warned that any possible impact on advertising and public relations revenues from the current liquidity crisis was unlikely to be reflected until early next year.