Shares of Interpublic Group of Companies Inc. (IPG) plummeted 5.4% in premarket trading on Friday, reaching a one-year low. The marketing services company fell short of profit expectations for the third quarter due to ongoing weakness among its technology and telecommunications customers.
Lower Net Income and Adjusted Earnings
Net income for the quarter dropped to $243.7 million, or 63 cents per share, compared to $251.8 million, or 64 cents per share, in the same period last year. Adjusted earnings per share, excluding nonrecurring items, were 70 cents, failing to meet the FactSet consensus of 73 cents.
On a positive note, revenue saw a growth of 1.5% totaling $2.68 billion, surpassing the FactSet consensus of $2.39 billion. This increase can be attributed to a rise in billable expenses, which saw an 8.2% surge to $369.5 million. Moreover, revenue before billable expenses inched up 0.6% to $2.31 billion.
Factors Affecting Growth
According to Chief Executive Philippe Krakowsky, the company faced several obstacles that hindered growth throughout the quarter. Client activity reductions in the tech and telecom sector, prevalent throughout the industry, played a significant role. Additionally, the performance of certain digital specialists contributed to the decline.
The stock has declined by 24.7% over the past three months through Thursday, while the S&P 500 has experienced a loss of 5.7%.