Interpublic Swings to Q4 Profit

Ad agency operator Interpublic Group reported a swing to a Q4 profit yesterday on lower operating expenses. The company posted net income of $69.1 million ($0.11/share) versus a loss of $22.9 million (-$0.08/share) a year earlier. This year's results reflect noncash pretax charges of $108 million ($0.16/share); last year's reflect a one-time charge of a $92.1 million ($0.20/share). Revenue dropped 1% to $1.88 billion from $1.9 billion a year ago and total operating expenses fell 7% to $1.71 billion. Interpublic, which owns agencies Lowe Worldwide, Campbell-Ewald and Carmichael Lynch, has been coping with earnings restatements, management turnover and the loss of business. The company recently gained some major accounts, however, including Wal-Mart and Pfizer's Lipitor drug. Interpublic is also the subject of takeover speculation: Maurice Levy, chairman and CEO of rival Publicis, said recently that his company has looked at Interpublic and would consider buying assets of the company.

Sources: Business Week, Wall Street Journal. Earnings Conference Call Q4 2006 [audio on Yahoo Finance]
Commentary: Global Guru David Herro's Eight International Heavyweights • No End In Sight For The Interpublic Nightmare
Stocks to watch: Interpublic Group of Companies, Inc. (IPG). Competitors: Omnicom Group Inc. (OMC), Publicis Groupe SA (PUB), WPP Group plc (WPPGY)

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