The delay by the Interpublic Group of Companies in publishing its latest earnings report sent marketing services stocks plunging on Monday, only for them to recover the following day when Omnicom’s relatively strong second quarter results were published.
Interpublic announced on Monday (August 5) that it was to delay the publication of its second-quarter earnings statement for a week, until August 13, so that management could spend more time reviewing the results before certifying them as accurate. The news sent Interpublic’s share price plunging by more than 20 per cent, closing at $14.99 (&£9.75).
Under new accounting rules in the US, the chief financial officer and the chief executive officer now have to sign off all quarterly earnings statements as well as annual results.
But Frederik Kooij, a European media analyst at JP Morgan, says: “The market is worried that the management have to clear up an accounting irregularity.”
The Interpublic announcement also triggered fears of poor results for the company and falls in the share price of more than seven per cent at Omnicom and WPP.
Yesterday (Tuesday) Omnicom published its second quarter results for the three months ending June 30 showing a surge in net income of nine per cent to $187.3m (&£121.92m) from $171.4m (&£111.6m) for the same quarter the previous year. Revenue grew by 9.7 per cent to $1.92bn (&£1.25bn) from $1.75bn (&£1.14bn) a year earlier. While revenue in the US increased by 21 per cent, international revenue fell by three per cent.
The news prompted a surge in Omnicom’s stock price of more than nine per cent when the markets opened on Tuesday.