GREY REPORTS REVENUE DECLINE

Company Blames Foreign Market Slowdown

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NEW YORK (AdAge.com) -- Grey Global Group reported on Tuesday a jump in third-quarter earnings due to accounting changes, but revenues were down because of a "slowdown in international markets."

Grey Global reported net income of $2.8 million compared with $1.5 million over the year-ago period. On a per-share basis, diluted earnings were $1.76, vs. $1.23 a year earlier.

Revenue down 1.9%
Third-quarter revenue fell 1.9% to $290.4 million from $295.9 million one year ago. Revenues for the quarter were down because of "adverse market conditions, coupled with local client losses and weakness in key advertising categories" in Northern Europe, and similar market conditions in Latin America.

The company said performance for the nine-month period ended Sept. 30 had been impacted by the recognition of "certain professional costs and other accruable expenses" in connection with the Justice Department's ongoing investigation of the print production industry.

For the nine months ended Sept. 30, Grey earned $8.7 million on revenue of $866.1 million, compared with earnings of $4.1 million on revenues of $915.1 million for the first nine months last year.

Stock option expense
Grey Global, parent company of advertising network Grey Worldwide and media shop MediaCom, said it intends to expense to cost of employee stock options starting in 2003.

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