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

Toronto startup embraces a new agency model

Send+Receive adopts project-based, 'hands-on' approach

Cineplex asks: Will lightning hit world’s biggest popcorn bag?

Promotion in Windsor builds on #WeatherOrNot campaign

3D printed origami birds burst out of Kubo shelter ad

Isobar, Astral drive bus passengers' attention to eOne movie poster

Plastic Mobile sends U.S. startups a Canada starter pack

Self-promo effort was designed to boost awareness of Canada's tech scene

On The Move: Hires at Twitter Canada, Initiative, The Idea Suite

A weekly update of who's headed where in Canadian marketing and communications

Account wins spur growth at Isaac Reputation Group

Toronto advertising agency adds eight new members to its team

Saatchi and the CCGSD tackle homophobia in sports reporting

The campaign follows two similar initiatives about gender equality in sports

ASC to crack down on paid social media endorsements

New guidelines for endorsers and influencers to come into effect next year

Torchia Communications wins Alliance Pharmacy Group

Toronto PR shop is the company's first-ever public relations AOR