Interpublic, the indebted advertising and marketing group, recorded a heavy loss in the first three months of the year as it sought to reorganise and retain business after disappointing results in 2002.
The company posted a net loss of $8.6 million in Q1, higher than analysts had expected. This compares with a profit of $59.8 million in the same period last year.
Overall revenue was up by 1% to $1.43 billion but Interpublic has been forced to devote resources to remedying accounting problems at its McCann-Erickson unit. It also incurred an $11 million charge related to Octagan Motorsports, the troubled motor sports division which is now up for sale.
Interpublic has also held discussions with Taylor Nelson Sofres as it looks to strike a deal to sell the market research firm NFO WorldGroup (see Taylor Nelson Looks At NFO WorldGroup Acquisition).
David Bell, the chairman and chief executive of Interpublic, described yesterday’s results as “disappointing and unacceptable” but insisted that steps were being taken to reverse the decline.
“Turnarounds take time. I believe our company’s operating results in the second half of 2003 and the first half of 2004 will finally provide us with a firm baseline for the future performance of the real Interpublic,” he said
The company saw profits fall by almost 80% last year (see Interpublic Sees Earnings Plummet In 2002) and it has debts in excess of $3 billion. Christopher Coughlin has been appointed chief operating officer with the remit to improve margins and stabilise the group’s financial position.
