INTERPUBLIC POSTS $13.5 MILLION SECOND-QUARTER LOSS

Faces $200 Million in Charges From Corporate Restructuring

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NEW YORK (AdAge.com) -- Interpublic Group of Cos. reported a net loss of $13.5 million today, and said it would take charges of up to $200 million in connection with a corporate restructuring that will include layoffs and consolidation of offices.

The agency holding company, parent

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of ad networks McCann-Erickson worldwide and Foote, Cone & Belding Worldwide, said the first $94.4 million in charges were included in the second-quarter results, with the rest coming in the third and fourth quarters.

$1.5 billion in revenue
Interpublic's second-quarter net loss of $13.5 million is down from net income of $109 million from the year-ago period. Revenue was up 0.6% to $1.5 billion, helped by the dollar's weakness against foreign currencies; after factoring out currency and acquisitions, revenue was down 3% on an organic basis.

U.S. revenue was up 1.7%, or 1.4% on an organic basis, while international revenue dropped 0.7%, or 8.1% on an organic basis.

The restructuring
The restructuring, initially announced last May, includes eliminating 1,450 positions and closing or consolidating 30 locations, Chief Financial Officer Sean Orr said.

Approximately 70% of the layoffs will come in international operations, mainly in McCann-Erickson Europe, CEO David Bell said. The layoffs won't be completed until the end of August, so the effects won't be noticed until the third quarter and beyond, he said.

The second quarter was a "mixed bag of financial progress and operational challenges" said Mr. Orr, who will step down from his post at the end of the month. While the U.S. organic revenue growth was "the first increase in some time," revenue growth continues to be spotty, he said.

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