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UPDATE 1-Omnicom quarterly revenue misses estimate
February 7, 2017 / 12:11 PM / 8 months ago

UPDATE 1-Omnicom quarterly revenue misses estimate

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Feb 7 (Reuters) - Omnicom Group Inc, the No. 1 U.S. advertising company, reported lower-than-expected quarterly revenue due to a strong dollar, following prominent political events such as Brexit and the U.S. presidential election.

Revenue, for the company which is one of the “big four” ad agencies, rose 2.1 percent to $4.24 billion, but missed analysts’ average estimate of $4.26 billion, according to Thomson Reuters I/B/E/S.

New York-based Omnicom, whose clients include Apple Inc , Procter & Gamble, McDonald’s Corp and Adidas, said negative impact of foreign exchange rates reduced revenue in the fourth quarter by 1.8 percent.

The dollar had risen 6.8 percent against a basket of major currencies in the quarter ended Dec. 31.

The company did not break up revenue by geography in its quarterly report. However, according to Thomson Reuters data, about 38 percent of Omnicom’s total revenue in 2015 came from outside the Americas region.

Omnicom said organic revenue in North America rose 0.6 percent in the latest quarter.

Subsidiaries of Omnicom and fellow competitor Publicis Groupe SA were subpoenaed by the U.S. Department of Justice in December, as part of an investigation whether ad agencies had rigged bids to favor in-house production units.

Rival Interpublic Group of Cos Inc earlier in December said that one of its domestic agencies had been contacted by the DoJ as part of the investigation.

Advertising companies have been exploring new revenue streams and are trying to keep up with clients’ increasing demand for video content.

The company’s net income rose to $348.7 million, or $1.47 per share, in the latest quarter, from $328.3 million, or $1.35 per share, a year earlier.

Analysts’ on average were expecting earnings of $1.44 per share. (Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shounak Dasgupta and Martina D‘Couto)

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