For the third quarter, all major units showed strong performance, said Interpublic Chairman-CEO Michael Roth, which is the parent of global agency brands such as McCann Erickson and Weber Shandwick, Deutsch, Martin Agency and R/GA.
Back in the black
The holding company saw quarterly profits jump to $38.7 million, compared with a net loss of $28.8 million in the third quarter of 2007. Through the first nine months of the year, net income was $56.7 million, up from a net loss of $31.5 million in the year-prior period.
The holding company reported revenue growth of 11.5% and organic revenue growth of 7.6% for the third quarter.
During an earnings call with investors, Mr. Roth combated criticism of embattled Lowe Worldwide, stating that Interpublic is pleased the agency has finally swung to profitability. However, the agency is soon to be without a CEO, and Mr. Roth confirmed that a search is underway to find someone to replace Stephen Gatfield. Mr. Gatfield, who remains exec VP-network operations for Interpublic, was appointed CEO of Lowe in March 2006, and his contract is up in early 2009.*
"We're very pleased with the management of Lowe," Mr. Roth said, noting that it's the first time in years an "orderly transition" of management is taking place at the agency.
The bulk of Interpublic's growth came from existing client business, Mr. Roth said. However, he noted that during the past month of so, Interpublic has seen the economy weigh on marketers' plans for the fourth quarter of 2008 and early 2009.
But the holding company continues to see demand for digital and integrated marketing solutions. "Clearly, clients are looking to spend more in digital than in traditional media," Mr. Roth said.
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UPDATE: This story clarifies Mr. Gatfield's tenure with Lowe.