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But Second Quarter Will Be Improvement Over First, CFO Says

By Published on .

NEW YORK (AdAge.com) -- Interpublic Group of Cos. will post another drop in revenue when it reports its second-quarter results next month -- but the agency company may be hoping for a very sharp recovery to produce its forecast of flat revenue for the year.

Speaking to investors at the Mid-Year Media Review, Interpublic's chief financial officer, Sean Orr, said the percentage revenue drop in the second quarter "is going to be a high single-digit number."

However, he noted this will be an improvement over the first quarter, when Interpublic reported a 15.2% revenue decrease.

Sticking by earnings growth
Mr. Orr would not give

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investors guidance on revenue for the full year, but he reaffirmed Interpublic's position that cost-cutting over the last year will allow it to deliver 15% earnings-per-share growth for the year, even if revenue is flat over 2001.

That appears to be a difficult target; Mr. Orr estimated that given revenue performance year-to-date, Interpublic would have to produce a second-half revenue increase in the high single- or double-digit percentages to deliver flat revenue in 2002. Year-over-year comparisons will get progressively easier in the third and fourth quarters, but client spending trends are still too tough to call, he said.

"The revenue environment has been difficult, and how good is good on the second half of the year is still in question," Mr. Orr said.

Advertisers are showing guarded optimism about a recovery and may increase spending in the second half, but "how much depends on how brave our clients are," he said.

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