The uncertainty in the US economy could affect WPP’s earnings in 2005 and 2006, Sir Martin Sorrell warned investors at a recent conference in New York.
Speaking at the Credit Suisse First Boston media and telecoms conference the WPP Chief Executive said that the company expected to see a 15% increase in earnings in 2004 and that earnings for 2005/2006 could decrease to between 10% and 15%, depending on the state of the US economy.
He said: “A negative factor next year will be what’s happening in America, whether the economy will be under control.” He added when America sneezes “we all catch a cold”.
Interpublic Group CEO David Bell spoke at the same conference and said that Interpublic were on line for an operating margin of 12%-15% even if organic growth trailed the economy.
He said: “We have not assumed anything other than low single-digit, sub-GDP organic growth. If we beat that, it becomes easier, but that’s how we see the turnaround.”
He denied rumours that Interpublic was considering a joint venture with Havas and said that despite a series of account losses there would be no more restructuring within the company.
