WPP-parent of Ogilvy & Mather Worldwide, J. Walter Thompson Co. and Y&R Advertising-posted first-quarter revenue of $1.43 billion, down 3.9% from the same period last year, or up 1.4% after factoring out the effects of currency conversions. Organic growth, after factoring out currency and acquisitions, was flat. WPP does not report full quarterly results.
Advertising and media revenue rose 3.1% after adjusting for currency, helped by strong new business at the media units, MindShare and Mediaedge:cia. Information and consultancy was the best-performing sector, with revenue up 4.6% after adjusting for currency. Public relations continued to suffer, down 3%.
Among regions, North American revenue grew 1.4%, the second quarter of revenue growth in the U.S. market. Continental Europe, Asia-Pacific and Latin American markets also showed growth, but the U.K. market was down 3.5% for the quarter.
The underlying conditions of the ad market are now stable, but 2003 is still likely to be a flat year, said WPP Group Chief Executive Martin Sorrell. Marketers remain cautious about spending and they have recently used the war and SARS outbreaks as excuses to hold off spending, he said.
"I'm neutral to positive about how I feel about things generally," said Mr. Sorrell. The war in Iraq had less of an impact in the first quarter than expected, he said. He noted January and February revenues were down year-over-year, but March was flat. The lack of a war effect was a surprise, said Mr. Sorrell.
"It's stabilization but without any oomph. This is nothing to get excited about, but it's better than where we were a year ago," he said.
April 25 price: $34.03
52-week high/low: $56.59/$25.93
Market cap: $7.86 B
First quarter revenue, % change: $1.43 B, -3.9%*
Stock quote: Chief Executive Martin Sorrell sounded a more positive note than previous months, but said the recovery shows no "oomph."
*Before currency conversion