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UPDATE 2-Omnicom results top Street on UK, Europe growth
July 20, 2017 / 11:15 AM / 5 months ago

UPDATE 2-Omnicom results top Street on UK, Europe growth

(Adds details from conference call, stock price, analyst quote)

By Sheila Dang and Anya George Tharakan

July 20 (Reuters) - Omnicom Group Inc reported better-than-expected quarterly results as the No. 1 U.S. advertising company benefited from higher spending from businesses in Europe and the United Kingdom.

That helped allay some concerns about growth abroad following Britain’s decision to leave the European Union. International sales made up about 43 percent of total revenue in the quarter.

The company said organic revenue rose 9.3 percent in UK and 7.8 percent in Europe in the quarter ended June 30. In North America organic revenue rose only 0.2 percent.

Robin Diedrich, senior analyst at Edward Jones, said in a note on Thursday that Omnicom’s North America organic sales growth marked one of the weakest quarterly growth rates since 2009.

The “Trump Bump,” or the rise in the market after the election of U.S. President Donald Trump, has waned and gridlock in Washington has cause companies to pause investments, Omnicom Chief Executive John Wren told investors on a conference call.

Advertising and marketing sectors suffered as a result, he added.

Advertising companies have been exploring new revenue streams and are trying to keep up with clients’ increasing demand for video content amid growing competition from consulting firms.

Smaller rival France’s Publicis earlier on Thursday reported a modest rise in underlying sales, compared with analysts’ estimate of a small drop, driven by a surge in revenue in North America, its biggest regional market.

Omnicom’s revenue fell 2.4 percent to $3.79 billion in the second quarter, but beat estimates of $3.74 billion, according to Thomson Reuters I/B/E/S.

The company, owner of agencies such as BBDO Worldwide, TBWA Worldwide and Goodby Silverstein & Partners, said the stronger U.S. dollar hurt revenue.

New York-based Omnicom, whose clients include Apple Inc , McDonald’s Corp and Adidas, said net income attributable to the company rose to $328.6 million, or $1.40 per share, from $326.1 million, or $1.36 per share, a year earlier.

Analysts had expected a profit of $1.38 per share.

Shares of Omnicom were up nearly 1 percent to $81.41 in morning New York Stock Exchange trading. (Reporting by Anya George Tharakan in Bengaluru, additional Reporting by Sheila Dang in New York; Editing by Sriraj Kalluvila and Meredith Mazzilli)

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