Omnicom beats forecasts as its merger nears

COM

COM Group, the largest US advertising company, reported a better-than-expected quarterly profit as ad spending strengthened in its home market, reinforcing expectations of strong growth for the industry in the second half.

The firm also said its $35.1bn (£22bn) merger with French-based Publicis is on track to close early next year, chief executive John Wren said on a post-earnings conference call.

Omnicom, home to agencies such as BBDO Worldwide and Goodby, Silverstein & Partners, said US revenue rose 3.2 per cent to $1.82bn in the third quarter.

Organic revenue grew 4.1 per cent overall and five per cent in the United States.

Revenue from the euro area declined by 1.6 per cent organically, led by Germany and France.

Excluding merger expenses, Omnicom earned 82 cents per share, ahead of the 80 cents expected by analysts.

Revenue at the firm, which is the first major advertising company to reveal its quarterly results, rose 2.5 per cent to $3.49bn.

The merger with Publicis, announced in July, has received clearances in South Korea and South Africa and the approval process was “well underway” in 44 countries, company executives said on the call.

The group said there were no plans to merge the two companies’ individual agency brands.

Omnicom, whose clients include Pepsi, Apple, Microsoft and AT&T, said reaction from clients and employees to the merger had been “very positive”.

“I’d be much more surprised if [client losses] didn’t happen in this case,” said Edward Jones analyst Robin Diedrich.

Publicis will report results today.