Interpublic Group of Cos.' revenue increased 1.3% to $1.87 billion in the third quarter compared to the same period last year. Organic revenue rose 7.1%.
Third-quarter operating margin increased a percentage point to 10.3%, and operating income was up 12% to $191.9 million. Net income was down 16% in the quarter, from $92.8 million during the third quarter in 2014 to $78 million this quarter.
The company beat expectations of $1.82 billion in revenue, according to Yahoo Finance.
"We are pleased to continue reporting strong results in our organic revenue growth and margin progress. Contributions to this performance came from across the portfolio," said IPG CEO Michael Roth in a statement. "We believe we are on track to exceed 5% organic revenue growth for 2015, above our previous target of 4% to 5%, and that we are well-positioned to deliver 100 basis points of operating margin improvement, the high end of our targeted range."
By comparison, the company's net income grew to $123.8 million in the second quarter, up 1.6% from the quarter a year earlier. Total revenue rose 1.3%, and organic revenue climbed 6.7%.
U.S. organic revenue growth was 7.1%, while international organic growth was 7.1%. By region, Latin America had over 14% growth; Asia Pacific 7.2%; and the UK 5.2%. In Continental Europe, Q3 organic growth was "essentially flat," the company said.
Almost every agency and discipline got a shout-out on the earnings call. PR agencies, "notably Weber Shandwick and GolinHarris," grew at a double-digit rate, said Mr. Roth.
Mr. Roth referenced all the media agency reviews, which, if decided in IPG's favor, could produce tailwinds for 2016, he said.
On the media front, he emphasized that the company "does not take ownership of digital media for resale to clients." "Our strong organic growth does not reflect the growth of digital media arbitrage revenue that you are seeing among some of our peers, who take principal positions and re-sell owned inventory to clients at a margin," he said. "We continue to believe that our role as an agnostic consultant is key and allows us to provide clients with the recommendations and services that are best for their business."
He's likely referring to competitors like Omnicom and WPP, which both have divisions that offer an arbitrage model with nondisclosed costs.
He also responded to a question about the latest media agency news regarding the Association of National Advertiser's effort to investigate allegations that agencies are collecting media rebates in the U.S. The ANA this week said it hired two firms -- Ebiquity and K2 -- to investigate the matter.
"The last I looked, the ANA doesn't have authority to subpoena," said Mr. Roth. "This is a look within the practices of an industry. From an IPG perspective, we're very comfortable on the rebate transparency; we're comfortable on contract transparency; and verification and review are part of our process. There's nothing that concerns us."
"It started with us 10-11 years ago, this whole issue of rebates," he added, referring to the holding company's troubles at the time. So this is nothing we're afraid of. We've been very clear on the rebate issues for 10 years now. It's in all of our contracts."