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CEO Predicts Year-End Turnaround for Economy

By Published on .

NEW YORK (AdAge.com) -- If expectations for a recovery in the ad market dimmed last week after Havas Advertising and Publicis Groupe reported their respective results, hopes grew this morning when Omnicom Group announced fourth-quarter earnings rose 15%.

"Our media and specialty agencies held up well, in no small part by the continued success in gaining new business," said Omnicom President-CEO John Wren, who also voiced an optimistic note that the worst advertising economy in decades could be over by the end of the year. "Clients are increasing plans for spending, and people are starting to look at the glass as half-full."

Profits up
Omnicom said

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2001 fourth-quarter profits rose to $164.1 million, or 87 cents per share, from $142.2 million, or 78 cents, from the same period in 2000. Net income for the year for the world's third-largest holding company was up 15.7%, while revenue increased 11.9%.

Organic growth for the fourth quarter rose by 4.7%, a slight increase over the 4.5% from the fourth quarter of 2000. But it was a strong quarter compared with Havas, for instance, which reported a 4.8% drop in organic growth for fourth-quarter 2001 from the same period the year before.

Bonus restrictions
Though Mr. Wren cautioned that profits were made possible because of the company's compensation system -- no bonuses are awarded unless agencies meet their revenue and profit goals for the year -- he did offer more optimism when he said Omnicom expects to meet its goal of 10% growth in earnings and revenue for 2002.

Interpublic Group of Cos., the world's largest holding company, will report its earnings Feb. 28. No.2 WPP Group will announce Wednesday morning.

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