U.S. Shows Growth; Further Layoffs Not Expected

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NEW YORK ( -- Omnicom Group reported a strong third quarter, with improvement in some long-suffering sectors and a letup in layoffs expected in coming months.

Omnicom -- whose advertising networks include DDB Worldwide, TBWA Worldwide and BBDO Worldwide -- posted $135.3 million in net income for the quarter, up 7.3% from last year's period, on $2.03 billion in revenue, a 14.7% increase.

U.S. showing growth
Geographic growth trends were the same as in the rest of the year, with the U.S. market showing growth and the economic recovery still stalled in Europe, said Chairman-CEO John Wren. He noted the U.K. market is showing modest growth, while continental Europe remains weak, but added the decline appears to be easing.

Among disciplines, some areas that had seen declining revenues earlier in the year stabilized in the third quarter, including public relations and recruitment and financial services advertising, said Randall Weisenburger, Omnicom's chief financial officer. After several quarters of dropping revenue, public relations posted a 5.2% increase, which helped it turn positive, up 1.8% for the first nine months of the year.

Improvement for '04
The ad marketplace will improve in 2004, said Mr. Wren, noting that while account-review activity had been depressed for the last eight months, it has picked up significantly in the last 30 days. While not a sign of "a grand turnaround in client spending," it is a good indicator for the next year, he said.

"We're seeing a more bullish attitude from our clients," said Mr. Wren.

Additionally, Omnicom's employment appears to have stabilized, thanks to client activity. While the company still cut some jobs overseas in the third quarter, Mr. Wren said there aren't any major staff reductions in the offing at the moment.

"Since most of our businesses are either growing or stabilizing, there aren't the level of discussions we've had at various points in the last three years about major adjustments in any part of our business," he said.

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