NEW YORK (AdAge.com) -- Interpublic Group of Cos. stock closed today at $11.44, down 29.8% after hitting a new 52-week low of $9.85 earlier in the day following Wednesday's earnings warning and announcement of additional earnings restatements.
Interpublic Slashes Profit Forecast
Nearly Doubles Earnings Restatement to $120 Million
In late-morning trading the stock was down 38.65% to $10 per share in the New York Stock Exchange, and trading was halted briefly.
Interpublic on Wednesday after the close of markets dropped its full-year earnings forecast to 85 cents to 90 cents per share, from $1.25 to $1.35, and third-quarter earnings of .08 cents to 10 cents per share, far below analysts' consensus of 28 cents per share. Additionally, it announced it will report charges of up to $120 million as part of a previously announced restatement of earnings for the last five years. The original restatement, announced in August, included $68.5 million in charges at its McCann-Erickson Europe unit.
Analysts were sorely disappointed by the new announcement, saying it points to lax management controls at the holding company level.
"We have lost faith in the company's ability to effectively manage operations in the short term and are concerned that more systemic problems may exist," said Troy Mastin, advertising analyst at William Blair & Co., in a report to investors.