(Adds details, analyst estimates)
NEW YORK, July 30 (Reuters) - Advertising company Interpublic Group (IPG.N) said on Wednesday second-quarter profit fell 28 percent as a tax provision offset a bigger-than-expected jump in revenue.
Interpublic, the parent company of agencies like DraftFCB and McCann-Erickson, said that higher spending by clients in Asia and the United Kingdom drove revenue, while the addition of new clients in advertising and public relations supported growth in the United States.
Interpublic Chief Executive Michael Roth also suggested that despite troubles in the economy — ranging from high fuel prices to a shaky job market — its clients continue to spend on marketing and the company should meet this year’s financial targets.
“While the growth that we posted during the first half demonstrates that we have yet to see retrenchment on the part of clients, we will continue to monitor the broader economic situation closely,” Roth said in a statement.
For the second quarter, Interpublic reported a net profit applicable to common shareholders of $88.1 million, or 17 cents a share, down from $121.5 million, or 24 cents a share, a year earlier.
The advertising services company said it made a tax provision in the second quarter of $79.1 million, compared with a benefit of $11.4 million in the same period of 2007.
Revenue rose 11 percent to $1.84 billion, while organic revenue, a closely watched figure that excludes the impact of acquisitions and foreign currency, rose 6.3 percent. Its operating margins were nearly 11 percent.
Analysts had been expecting the company to post earnings of 16 cents a share on revenue of $1.75 billion, according to Reuters Estimates.
Interpublic, whose shares are down 2 percent so far this year, has been trying to put behind it past accounting problems that threw the company into turmoil for several years, leading to some key account losses and management turnover. Earlier this year, it reached a settlement with the U.S. Securities and Exchange Commission over a probe dating back to 2002.
Lately, the company has been picking up new business, including wins for work on Dr. Pepper CBRY.L, Staples SPLS.O and Hyundai Motors America/Kia Motors (005380.KS).
Reporting by Paul Thomasch, editing by Maureen Bavdek, Dave Zimmerman