Q1: International strength offsets US miss
2.4% organic revenue growth topped the 1.4% consensus but the US fell considerably short with a decline of 0.1% (AE +1%), the second quarter in a row of contraction. International was ahead with estimated organic growth of 5.5% led by the UK and Europe. Absolute revenues were in line but would have been ~1.2% ahead excluding the impact of ASC 606, a new accounting standard introduced this quarter. Operating margins were flat (cons. -10bp) and operating income of $422m was 1% ahead. EPS of $1.14 beat consensus of $1.06 but, ex a one-time tax benefit of $0.06, was only $0.02 ahead. Questions remain as to why the US was so weak and whether this is a precursor for other regions. Additionally, the international strength does not seem sustainable.Omnicom Group is a holding company, engaged in providing advertising, marketing and corporate communications services. The company's networks and agencies provide a range of services in the following fundamental disciplines: advertising, customer relationship management, public relations and healthcare. The company's Service offerings include, among others, advertising, branding, content marketing, corporate social responsibility consulting, crisis communications, custom publishing, data analytics, database management, digital/direct marketing, digital transformation, entertainment marketing, experiential marketing, field marketing, financial/corporate business-to-business advertising, and imaging.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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