Omnicom Group posted third-quarter organic revenue growth of 3.3%, and the holding company maintained its 3.5% to 5% full-year growth target.

Speaking on a late afternoon earnings call, Chairman-CEO John Wren voiced optimism about Omnicom’s prospects for 2024 as new-business wins this year translate into revenue next year.

"I'm very confident, or I'll say confident, about our performance for 2024 because I think we have the right products, and we certainly have expanded who our clients are," Wren said.

Wren didn’t offer specific guidance for 2024, noting that Omnicom is still working on its bottom-up analysis of its business for the coming year. 

Wren tempered his optimism about Omnicom with caution about the overall market. “There’s still a lot of uncertainty in the marketplace,” he said.

Fourth-quarter prospects

As in past years, Wren reiterated that Omnicom’s fourth-quarter results will be affected by how much end-of-year project work comes to pass.

"We continue to plan cautiously," Wren said, "given the uncertainties in the macroeconomic and geopolitical environment including higher interest rates, oil prices, instability due to the wars in Ukraine and Israel and the continuing risk of a recession in the United States."

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The company delivered worldwide organic growth of 4.0% in the first nine months, in line with full-year expectations, Wren said. Omnicom maintained the full-year 3.5% to 5% organic growth target that it made in July.

Organic growth is a key financial measure that factors out acquisitions, divestitures and effects of exchange rates.

Third-quarter results

Worldwide revenue in the quarter ended Sept. 30 came in at $3.58 billion, up 3.9% vs. the same quarter a year ago.

That reflected organic growth of 3.3%, the positive effect of foreign currency translation of 1.7% and a decrease in revenue from acquisitions, net of disposition revenue, of 1.1%.

Wren said third-quarter organic growth of 3.3% was “in line with our expectations.”

The agency company reported third-quarter net income of $372 million, up from $365 million posted in the same period a year ago. Diluted earnings per share came in at $1.86, up from $1.77 in the year-ago period.

The consensus forecast among analysts had been for revenue of $3.57 billion and earnings per share of $1.85, according to investor site Seeking Alpha.

Organic growth by discipline in the third quarter compared to the year-earlier period was 6.1% for Advertising & Media, 4.3% for Precision Marketing, 3.8% for Healthcare and 9.2% for Experiential. Three disciplines saw a year-over-year decline in organic revenue: Public Relations, down 5.5%; Execution & Support, down 3.6%; and Commerce & Branding, down 1.7%.

Organic revenue in the U.S. rose 2.7%, below Omnicom’s worldwide growth. 

Organic growth in other regions increased by 5.7% in Euro Markets & Other Europe, 4.4% in the U.K., 19.2% in Latin America and 2.5% in Asia Pacific. Organic revenue fell by 10.8% in the Middle East & Africa and declined 1.7% in Other North America.

Results for agency companies

Omnicom is the second of the major agency companies to release third-quarter results.
 
Publicis Groupe last week raised its forecast for the full year after posting third-quarter organic growth of 5.3%. The French holding company now anticipates full-year organic growth in net revenue of 5.5% to 6%. 

Interpublic Group of Cos. reports third-quarter results on Oct. 20. WPP will give its third-quarter update on Oct. 26. 

Omnicom shares rose 0.7% today to close at $76.54. Omnicom announced its results after the market close, and shares decreased 1.4% to $75.50 in after-hours trading. Shares are well below the all-time high of $99.23 reached in July.