NEW YORK (AdAge.com) -- Interpublic Group of Cos. reported a 76% jump in third-quarter net income to $45.6 million up from $25.9 million in the year-ago period, when agency companies were hardest hit by the recession.
"As you can see, our third quarter showed further evidence of the broader economic recovery," said Interpublic CEO Michael Roth in a conference call with analysts today. "We're pleased with our performance year to date. Our agencies that have seen growth are investing in talent but we're also keeping close control on our costs. That is why we're confident in our ability to deliver our stated operating margin objective of greater than 8% for this year."
He later added that while "the first nine months of the year have been encouraging and the tone of client conversations has improved, there is still a degree of uncertainty."
Mr. Roth noted that key contributors to growth were clients in the automotive, packaged goods, and financial services sectors, all posting strong double-digit growth. Accounts in health and personal care were up in the mid-single digits, as did those in technology and telecom.
Among the agencies cited for contributing strong organic growth were: DraftFCB; Lowe & Partners; MediaBrands; Hill Holliday; Mullen; Weber Shandwick; Jack Morton; and Octagon. He noted that digital agencies were also key contributors to performance, singling out R/GA, Huge and McCann Worldgroup's MRM as strong performers.
During the call, Mr. Roth said that Interpublic is looking at 2010 as a transition year for McCann Erickson, but expects to start seeing improvement in 2011. The agency in April saw its four-year relationship with tiremaker Goodyear end, and also lost much of its Verizon business, with the exception of the Fios account. McCann in July did snag the IHOP creative account from MDC Partners' Vitro Agency, though. (McCann had the account from 2002 to 2007.)
For the first nine months of the year, Interpublic posted profit of $58.4 million. Last year, the company reported a loss of $16.3 million for the same period. Interpublic's revenue for the first nine months of 2010 were $4.52 billion, up from $4.23 billion for same period in 2009.