Omnicom Profit Rises 24% for First Quarter

Financial Services, Tech, Pharma Led Holding Company's Growth

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Omnicom Group's first-quarter net income rose 23.6% to $201.9 million, compared to $163.4 million in the first quarter of 2010.

"We are pleased with our operating results for the first quarter," said Omnicom President-CEO John Wren, speaking on a conference call with analysts this morning. "These results build on the progress we made during 2010 and also showed the strengthening of our business over the last year."

Worldwide revenue for the first quarter of 2011 increased 7.9% to $3.15 billion. U.S. revenue for the first-quarter 2011 increased 3.8% to $1.65 billion, and international revenue increased 12.9% to $1.49 billion.

Omnicom, which houses creative networks DDB and BBDO, as well as media agencies PHD and OMD, reported 4.1% organic growth in the U.S. for first-quarter 2011. Excluding Chrysler -- formerly one of the company's largest accounts, which it lost in early 2010 -- organic revenue growth was 6.8%. Mr. Wren also said that the company expects growth for the year to "return to more historic levels." Geographically, the U.S. accounted for about 52.4% of the company's revenue.

The company's auto business had low single-digit growth, but the financial-services, technology, health-care and pharma, food and beverage and consumer-product segments led Omnicom's first-quarter growth, each having double-digit growth rates.

Although Omnicom lost Chrysler, its agencies have brought in some significant clients, such as Johnson & Johnson baby products, Bristol Meyers Squibb, GlaxoSmithKline, Gap and additional Chevy business.

Mr. Wren highlighted Omnicom's acquisition of Australian agency Clemenger and its recent acquisition of digital customer-insight agency Communispace during the call, noting that both deals are part of a series of strategic acquisitions.

Mr. Wren also said that Omnicom had made "substantial progress" with the company's house-cleaning that reorganized or disposed of underperforming businesses in 2010. He added that although Omnicom is not finished reviewing all the companies in its portfolio, the company does not expect to "incur significant changes" through the remainder of the year.