WPP trims full year forecast as Olympics, election revenues disappoint

WPP, the largest of the agency holding companies, has lowered its full-year outlook after not doing as well as expected from the Olympics, the U.S. presidential campaign and the European soccer championships. Shares opened 5% lower at 768.3 pence in London as the company said Thursday that it expected revenue growth between 2.5% and 3% […]

WPP, the largest of the agency holding companies, has lowered its full-year outlook after not doing as well as expected from the Olympics, the U.S. presidential campaign and the European soccer championships.

Shares opened 5% lower at 768.3 pence in London as the company said Thursday that it expected revenue growth between 2.5% and 3% for the year, down from the 3.5% target it set in August.

Third quarter revenue was up 1.6% to 2.5 billion pounds ($4 billion). The company did not disclose profit figures in the trading update.

“In some ways, the company is a proxy for the global economy and, even into 2013 WPP is managing down expectations,” said Richard Hunter, head of securities at Hargreaves Lansdown Stockbrokers.

“The reaction of the share price in early trade is testament to a market which is searching for corporate good news stories, but is finding them hard to locate,” Hunter said.

WPP said the three big events did support growth but not as much as expected, with money often switched from existing budgets, “particularly in the cases of the UEFA Championships and Olympics.”

Revenue fell by 0.4% in North America and 2.1% in western continental Europe, WPP said. Latin America was the best-performing region with growth of nearly 15%.

WPP said that in the U.S. it was worried about the government’s handling of debt and the looming “fiscal cliff” of expiring tax and spending legislation, which could result in automatic tax increases at the end of the year if politicians do not agree on new budget terms.

“Fears remain that whoever wins the presidential election, will be unable to deal with these issues given a dead-locked Congress,” the company said.

In Canada, WPP owns the Grey, Ogilvy & Mather, JWT, Hill & Knowlton, Kantar and Y&R groups of agencies. In 2011, North America accounted for approximately 35% of its global revenues.

Advertising Articles

BMO looks to humanize online investing in new campaign

First effort from KBS highlights the bank's AdviceDirect investing tool

Omnicom Group takes full control of Critical Mass

New York-based holding company buys Critical Mass's remaining stock

Royal Roads University gives students a look into the future

School replaces traditional advertising with aggressive social and digital campaign

TransCanada cuts ties with PR firm over campaign concerns

Leaked documents recommend using third parties to attack the pipeline's opponents

Kashi Canada’s quest to ‘Plant it Forward’

Health food brand gets Canadians closer to real food with urban garden project

Maple Leaf Foods launches ‘Songs in the Key of Wiener’

Facebook campaign for Larsen Wieners pays homage to the “As Seen On TV” era