It has been about a month since the last earnings report for Omnicom (OMC). Shares have added about 3.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Omnicom due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Omnicom Surpasses Q3 Earnings Estimates
Omnicom reported mixed third-quarter 2019 results wherein its earnings beat the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings of $1.32 per share beat the consensus mark by 2 cents and increased 6.5% on a year-over-year basis.
Total revenues of $3.6 billion missed the consensus estimate by $13 million and decreased 2.4% year over year on a reported basis. The year-over-year decrease was due to negative foreign exchange rate impact of 1.5% and decline in acquisition revenues, net of disposition revenues of 3.1%, offset by organic revenue growth of 2.2%.
Other Quarterly Details
Across fundamental disciplines, advertising increased 3.4%, CRM Consumer Experience was up 1.8%, CRM Execution & Support declined 1.5%, Public Relations decreased 3.8% and Healthcare increased 9.5%, organically, year over year.
Across regional markets, year-over-year organic growth was 2.7% in the United States, 2.7% for Other North America, 6.6% for Latin America, 3.0% in the United Kingdom, 1.6% for the Euro Markets and Other Europe and 0.4% for Asia Pacific. Middle East and Africa was down 4.5%.
Operating profit in the quarter came in at $473.3 million. Operating margin increased to 13.1% from 12.7% in the year-ago quarter.
How Have Estimates Been Moving Since Then?
Estimates review followed a downward path over the past two months.
VGM Scores
Currently, Omnicom has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Omnicom has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Omnicom Group Inc. (NYSE:OMC): Free Stock Analysis Report
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