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INTERPUBLIC TO STEP UP COST-CUTTING EFFORTS

Holding Company Reports Disappointing First Quarter

By Published on .

NEW YORK (AdAge.com) -- Interpublic Group of Cos. management said it plans to step up cost cutting, after reporting another disappointing quarter.

Interpublic reported a $8.6 million loss

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for the first quarter of 2003, compared to $59.8 million in income in 2002. Revenue showed marginal growth of nearly 1% to $1.43 billion, helped by currency fluctuations. On an organic basis --factoring out currency and acquisitions -- revenue dropped 5.4%.

Rising costs
Currency also caused rising costs, including 4.5% rise in salary expenses, in spite of a reduction of 1,400 employees worldwide during the quarter, and 15.4% increase in office expenses.

Additionally, Interpublic recorded a $11.1 million charge to write down assets of Octagon Motor Sports, the troubled sports marketing unit it has put on the block.

In a statement announcing results, company management said it will spell out an "accelerated cost savings plan" when it releases second-quarter results in August.

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