- Interpublic Group slashed its 2023 organic revenue growth forecast in half.
- The company said sales have been especially hurt by falling business from tech firms.
- Shares of IPG fell into negative territory for the year.
Interpublic Group of Companies (IPG) was the worst-performing stock in the S&P 500 after the global advertising agency slashed its 2023 organic revenue growth forecast as business from tech companies slumped.
IPG now anticipates full-year organic revenue to increase from 1% to 2%, down from its previous estimate of a gain of 2% to 4%.
CEO Philippe Krakowsky explained that in the second quarter the company saw “the same puts-and-takes on revenue” that occurred since the beginning of the year. He said that among the firm’s client sectors, tech “continued to weigh specifically on growth.” He added that “macro uncertainty” affected some of IPG’s specialty assets and traditional consumer agencies.
In the second quarter, the company reported total revenue dropped 2.5% to $2.67 billion. Organic revenue slipped 1.7%. Krakowsky indicated that was “inconsistent with our expectations and long-term track record of strong growth.”
However, he noted that new business performance has been exceptionally strong. He argued that the strength of IPG’s offerings, underpinned by its foundational data and technology infrastructure, “will provide strong tailwinds as we move into the back half of this year and even more so in 2024.”
Shares of IPG had already slumped two days ago after rival Omnicom Group (OMC) reported weak quarterly results. Friday’s decline of over 13% put the stock in negative territory for the year.