Profit & Loss: Industry earnings reports put end to an awful year

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Companies gladly closed the books on 2001 as more advertisers, media companies and agencies reported financial results last week.

Among marketers, falling media rates helped Unilever post fourth-quarter earnings of $789 million, compared with a year-ago loss of $337 million, despite a sales decline of 3% to $11.7 billion dollars. Net income for the quarter was $207 million, vs. a $945 million year-ago loss. (See related story, P. 1.)

Campbell Soup Co.'s earnings fell 25% to $203 million for the quarter ended Jan. 27 due to a combination of lower soup sales, increased marketing investment and softness in Godiva chocolate sales.

Media giant Viacom reported a 16% increase in revenue for 2001 to $23.2 billion. But it showed a net loss of $224 million after factoring in a $517 million charge to cover costs of combining some operations of CBS and UPN, restructuring MTV Networks and retrofitting Blockbuster stores for DVD rentals.

Viacom's advertising revenue fell 2% in 2001, but there are "promising signs" in spending during the first half, said Mel Karmazin, president-chief operating officer.

For the second quarter ended Dec. 31, News Corp.'s Fox Entertainment Group showed a net loss after charges, due to a $909 million charge for losses from its sports programs. Fox posted a $606 million net loss after the charge, vs. a $23 million loss a year ago. News Corp. itself posted a $203 million net profit, down from $270 million a year ago.

global growth

Helped by acquisitions, Publicis Groupe reported a 37.5% growth in revenue for 2001 to $2.13 billion, with a 3.1% organic growth rate. The French advertising company showed revenue growth in all world regions except North America, where organic growth dropped 1.2%. Total revenue was up 50.4% to $908 million, thanks to acquisitions including Nelson Communications and Sanchez & Levitan as well as the addition of fourth-quarter revenue figures from Zenith Media, a joint venture with Cordiant Communications Group that merged with Publicis' Optimedia unit. Including Zenith's fourth-quarter contribution, Publicis' net new billings worldwide topped $2 billion and total billings rose 41.2% to $10.4 billion in 2001.

Paris-based competitor Havas Advertising reported 2001 revenue of $1.9 billion, up only 0.3% on a comparable basis, excluding acquisitions, currency fluctuation and what Havas called "deconsolidation" as the company dismantled its diversified agencies group. Organic growth fell by 1.9% in North America but grew between 2% and 3% in all other regions. In one ominous sign, Havas reported a 4.8% drop in organic growth for the fourth-quarter 2001, compared with the same period the year before.

Fast Facts

The following companies will report earnings this week:

Feb. 19: Omnicom Group; Wal-Mart Stores

Feb. 20: WPP Group

Feb. 21: Nordstrom; Diageo Corp.; Radio Shack Corp.; J.C. Penney Co.

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