IPG forecasts cuts in light of 18% drop in Q3 PR revenues

NEW YORK: PR revenues at Interpublic Group have declined by 18% in the third quarter on a year-over-year basis. IPG's PR holdings include Weber Shandwick Worldwide, Golin/Harris International, and The MWW Group.

NEW YORK: PR revenues at Interpublic Group have declined by 18% in the third quarter on a year-over-year basis. IPG's PR holdings include Weber Shandwick Worldwide, Golin/Harris International, and The MWW Group.

IPG also reported a 44.9% decline in its third-quarter operating profit, which fell to $74.4 million from $135 million in same quarter of 2001.

During an investor conference call last Tuesday, IPG management said that layoffs were in the future as the group attempts to reach its targeted operating margin of approximately 16.5%. Operating margin in third quarter slipped to 5%.

Nonetheless, WSW, IPG's flagship PR agency, said that it wasn't anticipating any major staff cuts.

"While we reserve the right to evaluate the business on an ongoing basis," said WSW CEO Harris Diamond, "we continue to believe that we are currently right-sized."

IPG also said that the SEC has launched an informal inquiry into accounting irregularities at its McCann-Erickson advertising unit. Accounting errors at McCann have forced the company to restate $181.3 million in previously reported earnings, dating back to 1997.

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