Interpublic Group Q2 2020 Earnings Report
Key Takeaways
Interpublic Group's second-quarter net revenue decreased by 12.8% as reported, with an organic decrease of 9.9%. The adjusted EBITA margin was 3.4%, and diluted earnings per share was a loss of $0.12 as reported, and $0.23 as adjusted for restructuring and other items. Despite the challenges, the company continued to invest in talent, tools, and differentiated capabilities.
Second-quarter net revenue decreased 12.8% as reported, with an organic decrease of 9.9%.
Adjusted EBITA margin was 3.4%, and 9.4% before the restructuring charge.
Diluted earnings per share was a loss of $0.12 as reported, and $0.23 as adjusted for the restructuring and other items.
The company took actions to lower operating expenses structurally and permanently, resulting in a restructuring charge of $112.6 million.
Interpublic Group
Interpublic Group
Forward Guidance
The environment remains unclear for as long as COVID is a threat to everyday life, and as a result, visibility to revenue remains challenging, and client decision-making difficult to forecast.
Positive Outlook
- New-business-positive year to date and trailing twelve months.
- Pipeline of business opportunities is quite solid, which is indicative of pent-up demand.
- United States and Continental Europe were somewhat better in June than in May.
- Top-20 clients and top-100 clients are performing better than the results that were reported.
- The restructuring actions that we have taken position IPG well for the future.
Challenges Ahead
- The spread of the virus and its impact on the sentiment and behavior of consumers.
- Impact on income levels and business supply chains.
- Actions of government authorities, including economic stimulus and social support.
- Visibility is still significantly challenged, for our clients and for us.
- Biggest risk to recovery has to do with public health challenges that are beyond our control.