Publicis 1st-Quarter Sales Rise 1.3%, Missing Analyst Estimates
Publicis Groupe SA (PUB), the world’s third-biggest advertising company, said first-quarter sales rose 1.3 percent and characterized 2013 as a difficult year as some European economies remained in crisis.
Shares fell 5.4 percent at 3:46 p.m. in Paris after the report unexpectedly came out during trading hours. Publicis spokeswoman Peggy Nahmany declined to comment on the early release of the statement.
First-quarter revenue, stripping out effects from currency fluctuations and acquisitions, was 1.56 billion euros ($2 billion), Paris-based Publicis said in a statement today. Publicis credited the low growth to an unfavorable comparison to the year-earlier period, when Publicis had sales growth of 4.1 percent, and steep declines in Europe.
The sales growth was below consensus estimates, Goldman Sachs and Cheuvreux said in notes to investors. Richard Jones, an analyst at Goldman in London, said it may result in “near- term weakness in the stock.”
Chief Executive Officer Maurice Levy said in the statement that “2013 is turning out to be a difficult and contrasted vintage, with on the one hand the United States consolidating their growth and on the other Europe suffering.”
Publicis, which owns the Leo Burnett and Saatchi & Saatchi ad agencies, said France and southern European continued to be “main risk areas” due to economies there. North America accounted for half its first-quarter revenue. Publicis said a pick-up in worldwide sales later this year will help the company exceed its 2012 performance.
Publicis forecast annual growth between 3.2 percent and 3.6 percent for 2013.
To counter a slowdown in advertising, companies such as Publicis and its London-based rival, WPP Plc (WPP), have been expanding by buying digital assets and groups in fast-growing markets. Revenue from digital activities now represents 37 percent of total sales.
Organic growth in Europe for the quarter fell 6.5 percent, while in North America it rose by 4.3 percent and by 5.5 percent in key emerging markets like Brazil, Russia, India and China.
Net new business wins in the first quarter totaled $2.1 billion, from brand such as Godiva, Pfizer, Coca Cola and Spotify.
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