Interpublic Quarterly Profit More than Doubles

Holding Company Credits Growth in Retail, Auto, Financial Services

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CHICAGO ( -- Interpublic Group of Cos. reported that second-quarter net income more than doubled to $83 million, or 22 cents a share, from $31 million, or 4 cents a share, in the year-ago period. Revenue rose 9.7% to $1.62 billion from $1.47 billion.

"The second quarter provided additional indications that we've come through the worst of the impact of the economic crisis. We now expect to see positive organic growth for the year in 2010," Interpublic CEO Michael Roth said during today's earnings call, later noting that "once again, Mediabrands and DraftFCB were the leading drivers of our success during the quarter" and "continued expansion of the General Motors relationship at MRM were also positive signs during the quarter." Interpublic, the world's fourth-largest agency holding company, posted 8.5% organic revenue growth worldwide for the quarter.

Mr. Roth also said major contributors to growth are the accounts in the retail, auto and financial-services sectors, noting that in 2009 those sectors slowed more than others. In the company's Constituency Management Group, which houses much of Interpublic's marketing-services agencies, revenue increased 6.7% on an organic basis. Mr. Roth said double-digit growth included "strong increases in events and public relations."

In the auto sector, Mr. Roth said the strength for the year and for the quarter reflects Deutsch's win of Volkswagen as well as "increased spend at Hyundai and General Motors, in general, including MRM." He said Campbell-Ewald's loss of the Chevrolet business "is not a significant number for us."

MRM, part of McCann Worldgroup, has been faring better this year than McCann Erickson, which 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, however, this month snagged the IHOP creative account from MDC Partners' Vitro Agency. McCann had the account from 2002 to 2007.

"At McCann Worldgroup, new leadership is in place, and we're working to harness the power of the industry's premier global network and its full range of aligned marketing service agencies," Mr. Roth said.

DraftFCB in April won State Farm's creative and digital accounts, as well as paint-maker Valspar's $35 million creative account. But Kraft earlier in the year had shifted its Planters and Macaroni & Cheese accounts from DraftFCB to Omnicom and Crispin Porter & Bogusky, respectively.

Responding to an analyst, Mr. Roth said Interpublic's head count was up 500 employees in the second quarter, adding that "our recruiting will follow the revenue."

Interpublic's stock rose shortly after the morning bell today to $8.95 a share, up 8.5% from the close of yesterday's trading.

For the first half of the year, Interpublic posted earnings of $12.8 million. Last year, the company reported a loss of $42.2 million for the first half. Interpublic posted first-half of 2010 revenue of $2.99 billion, up from $2.80 billion for the first half of 2009.

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