Omnicom Reports Organic Growth Driven by Advertising

Ad Business Increased 7.7%, PR Only 0.1%

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Omnicom on Tuesday reported earnings for its second quarter of 2016 that beat analyst expectations, and organic revenue growth led by the advertising category.

The advertising services company reported earnings per share of $1.36, beating analyst expectations of $1.33, according to estimates from Yahoo Finance. The company, however, fell short of expectations of $3.9 billion in revenue. Omnicom's worldwide revenue in the quarter increased 2.1%, to $3.88 billion, from $3.8 billion during the same period last year.

Revenue from organic growth, which does not include revenue from acquisitions or foreign exchange rates, increased 3.4%. Net income for the second quarter of 2016 increased 3.9%, to $326.1 million, from $313.9 million in the second quarter of 2015.

Omnicom's portfolio includes Omnicom Media Group's OMD and PHD, BBDO, DDB, Fleishman-Hillard and TBWA, among other agency networks.

Across regional markets, organic revenue growth in the second quarter of 2016 was 3.2% in North America, 3.3% in the U.K., 4.3% in Europe, 4.5% in Asia Pacific and 1.7% in Latin America, compared to the same period last year. Organic revenue declined by 1.2% in the Middle East and Africa.
Advertising once again led the holding company for organic growth by discipline, compared to the same period last year. Advertising increased 7.7%, public relations increased 0.1% and specialty communications increased 4.4%, while CRM decreased 2.7%.

Omnicom in the first quarter reported an increase in net income of 4.4%, to $218.4 million, compared to the same period last year. The company's worldwide revenue in the first quarter increased 0.9% to $3.5 billion from $3.47 billion.

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