The agency company reported revenue dropped 2.9% for the quarter to $1.44 billion. Revenue fell more than 3% on an organic basis after factoring out acquisitions and currency effects. Weakness was most pronounced in North America among regions and public relations among disciplines.
North American revenue dropped 6.8% in the quarter, while U.K. revenue was up 0.7%, continental Europe was up 6% and the rest of the world was down 6.7%. Decreases were seen across disciplines: advertising and media revenue, down 1.9%; branding and specialist communications, down 2.4%; information and consultancy, down 2.9%; PR, down 7.8%.
Finance Director Paul Richardson said revenue for the fourth quarter and full year is now expected to be down. WPP had expected much easier comparisons starting in September, but that month came in flat and signs of weakness continue, Mr. Richardson said. He noted WPP has brought in $2.9 billion in net new business year-to-date-ahead of the $2.5 billion added in the same period last year-but new billings are slow to show up in revenue, so effects of recent wins such as Mattel and Gillette Co. may not show up until 2003.
In spite of recent upbeat comments from broadcasters including Viacom (see The Week, P. 10), advertising and the U.S. economy remain weak, said Group Chief Executive Martin Sorrell. There are signs now of a slowdown in consumer spending and concern over holiday retail sales is surfacing, he said. True recovery may have to wait until 2004, he said.
"If you want to depress yourself, you can find some data to depress yourself," said Mr. Sorrell. "There's some evidence of a double-dip and we have to be concerned about it." Depressed investors sent the stock tumbling 7% to $33.42 the day of WPP's news. The stock earlier this month bottomed at $30.16, its lowest point since 1998.
Reporting this week:
Oct. 29: Omnicom Group, Procter & Gamble Co., Clear Channel Communications
Oct. 30: Meredith Corp.
Oct. 31: Primedia
Nov. 1: Interep National Radio Sales