Omnicom Earnings & Revenues Surpass Estimates in Q3, Increase Y/Y

Omnicom Group Inc. OMC reported impressive third-quarter 2024 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

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Earnings of $2 per share beat the consensus estimate by 3.1% and rose 9.1% from the year-ago quarter. Total revenues of $3.9 billion outpaced the consensus mark by 2.3% and grew 8.5% on a year-over-year basis.

Top-line growth was led by a rise of 6.5% in revenues from organic growth and a 2.1% increment in acquisition revenues, net of disposition revenues, driven by the acquisition of Flywheel Digital in the Precision Marketing segment.

Omnicom shares have gained 14.4% over the past three months, outperforming the 7.5% increase of the industry and the 4.7% rise of the Zacks S&P 500 composite.

OMC’s Organic Growth Across Disciplines & Regions

Across fundamental disciplines, Experiential revenues improved 35.3% year over year compared with our estimate of a marginal rise. Revenues from Advertising & Media increased 9.4% from the year-ago quarter, outperforming our expected rise of 7.6%. Branding & Retail Commerce revenues increased 5.4%, meeting our estimate. Public Relations revenues increased 4.3% year over year compared with our anticipated 5.9% growth.

Precision marketing revenues rose marginally year over year, underperforming our anticipated increase of 5.7%. Execution and Support increased by a slight margin compared with our expected marginal growth of 0.2%. Healthcare revenues declined 1.1% organically on a year-over-year basis against our estimate of a 2.9% increment.

Across regional markets, year-over-year organic revenue growth was 6.5% in the United States, 10.9% in the Asia Pacific, 6.8% in European Markets & Other Europe, 24.8% in Middle East & Africa, 8.7% in Latin America, and 1.5% in Other North America. Revenues marginally declined in the United Kingdom.

Margin Performance of Omnicom

EBITA in the quarter amounted to $622.3 million, up 7.9% from the year-ago quarter. The EBITA margin was 16%, increasing 10 basis points (bps) on a year-over-year basis. Operating profit of $600.1 million increased 7% year over year. The operating margin declined 20 bps to 15.5%.

Omnicom carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot of OMC’s Peers

Accenture plc ACN reported better-than-expected fourth-quarter fiscal 2024 results.

ACN’s earnings (excluding 13 cents from non-recurring items) of $2.8 per share beat the Zacks Consensus Estimate marginally and increased 3% from the year-ago quarter. Total revenues of $16.4 billion beat the consensus estimate by a slight margin and gained 2.6% on a year-over-year basis.

FactSet Research Systems, Inc. FDS posted impressive fourth-quarter fiscal 2024 results.

FDS’s earnings per share (excluding $1.4 from non-recurring items) of $3.7 beat the consensus mark by 3.9% and increased 27.7% from the year-ago quarter. Revenues of $562.2 million surpassed the Zacks Consensus Estimate by 2.7% and gained 4.9% from the year-ago quarter.

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