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Interpublic (IPG) to Report Q4 Earnings: What’s in Store?

Zacks

The Interpublic Group of Companies, Inc. IPG is scheduled to report fourth-quarter 2018 results on Feb 13, before the opening bell.

Over the past six months, shares of Interpublic have gained 1.2% against the industry and the Zacks S&P 500 composite’s decline of 10% and 4.2%, respectively.


Let's check out how things are shaping up for the announcement.

Top Line to Decline Year Over Year

The Zacks Consensus Estimate for fourth-quarter 2018 revenues is pegged at $2.32 billion, indicating year-over-year decrease of 0.8%. The top line is expected to be hurt by net divestitures, which are likely to be partially offset by higher organic growth.

The Zacks Consensus Estimate indicates organic growth of 4% in the to-be reported quarter compared with 3.3% organic growth in fourth-quarter 2017.

The company is likely to grow organically across both the United States as well as internationally. Organic growth in the United States is expected to be driven by strength across media, advertising, public relations and digital specialist agencies. Solid revenues from Latin America, Asia Pacific, Europe and UK are likely to drive organic growth in international markets.

In third-quarter 2018, the company’s top line increased 3.4% year over year, driven by organic growth of 5.4%. The company witnessed organic net revenue growth of 5% in the United States and 6% in international markets in the third quarter. However, there was a negative impact of 1.3% from foreign currency movement and 0.7% from net divestitures.

Bottom Line Expectations

The Zacks Consensus Estimate for earnings per share (EPS) in the to-be-reported quarter is pegged at 81 cents, indicating year-over-year growth of 2.5%. In third-quarter 2018, adjusted earnings of 48 cents per share increased 29.7% year over year.

Interpublic’s digital capabilities, diversified business model and geographic reach offer a distinctive competitive advantage. It continues to look for strategic investments and buyouts to expand in high-growth regions and key world markets.

What Our Model Says

Please note that according to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially when the company is seeing negative estimate revisions. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Interpublic has an Earnings ESP of 0.00% and a Zacks Rank #4.

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on earnings:

Copart CPRT has an Earnings ESP of +1.63% and a Zacks Rank #2. The company is expected to report second-quarter fiscal 2019 results on Feb 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

ICF International ICFI has an Earnings ESP of +0.41% and a Zacks Rank #3. The company is scheduled to release fourth-quarter 2018 results on Feb 26.

IQVIA Holdings IQV has an Earnings ESP of +0.37% and a Zacks Rank #3. The company is slated to report fourth-quarter 2018 results on Feb 14.

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