Shares of Omnicom Group Inc. (NASDAQ: OMC) experienced a significant decline today, dropping 10.6% to reach an 11-week low. This decline not only affected Omnicom but also caused rival Interpublic Group of Cos. (NYSE: IPG) to slump 6.5%, making it the second-largest loser in the S&P 500.
In its second-quarter earnings report, Omnicom revealed that its net earnings per share had increased by 8.3% compared to the previous year, reaching $1.82. This beat analysts’ expectations, with adjusted EPS excluding nonrecurring items coming in at $1.81, surpassing the FactSet consensus of $1.80.
However, while the company’s revenue experienced a modest growth of 1.2% to reach $3.61 billion, it fell short of the FactSet consensus of $3.61 billion. J.P. Morgan analyst David Karnovsky expressed caution regarding fourth-quarter project work, as previous years with lower-than-expected budget flushes have coincided with economic uncertainty.
Despite this recent decline, Omnicom’s stock has still gained 7.3% year-to-date, outperforming the broader S&P 500, which has risen 18.9%.
This setback serves as a reminder of the ongoing volatility within the marketing, advertising, and corporate communications industry.