The holding company posted net income of $201.5 million for the quarter, up 23% from the year-ago period, or up 8.7% after factoring out accounting changes enacted in 2001. Net income for the year rose 28% to $643.5 million, or 10% after factoring out the accounting changes.
Sale of Razorfish stake
Revenue for the quarter rose 7.5% to $2.12 billion and annual revenue was up 9.4% to $7.54 billion. In a conference call with analysts, Chief Financial Officer Randall Weisenburger said this marks the 16th-consecutive year and 46th-consecutive quarter of revenue and earnings growth for Omnicom. The claim factors out a $63.8 million gain on the sale of Omnicom's stake in I-shop Razorfish during the first quarter of 2000, which caused a year-over-year drop in reported net earnings a year later.
Omnicom is the parent company of
Traditional advertising revenue grew 10.2% for the fourth quarter and 9% for the year, while customer relationship management rose 8.7% in the quarter and 14.2% for the year and specialty communications rose 14.4% for the quarter and 17.6% for the year. Public relations, where revenue dropped 10.4% for the quarter and 6.2% for the year, remains a "weak spot," Mr. Weisenburger said.
Cutbacks in Europe
Domestic revenue rose 8% for the quarter and 15% for the year, while international revenue rose 6% for the quarter and 3% for the year. Among geographic regions, Germany and Brazil remain weak, Chairman-CEO John Wren said. He noted that given the continued weakness in some European markets, additional "cost actions," including headcount reductions, may be needed in the region during the first quarter.
The ad market outlook is cautious in the short term due to the risk of war in Iraq but bullish in the long term, Mr. Wren said. He anticipated pent-up demand for advertising will be released once the Iraq situation is resolved. The strong broadcast TV ad market and sellouts of the Super Bowl and Academy Awards broadcasts are signs of strength, he said.
"Companies have restructured to the point where there is no more to do and they have to address their market share," Mr. Wren said. "We'll start to see that after some of these clouds fade."