Omnicom Group Inc: Show Me The Money

Will stock investors see better earnings next quarter?


OMC (Omnicom Group Inc., $70.24) is one of the world’s largest advertising, marketing and corporate communication services you can find today. Omnicom also has a healthcare marketing group knowns as Omnicom Health Group.

OMC didn’t beat their earnings last quarter and investors aren’t happy. The worst part is the company is still expecting a decrease in revenue in the next quarter. Investors are also concerned about the money spent with their recent acquisition of Elsevier’s Pharmacy Communication Group located overseas in Japan. This will make another year for less revenue.

(Screenshot from StockTwits Chart IQ)

Last year OMC’s net income decreased by 5.2%, or $60.2 million, SGA costs rose to $6.1 million, and the company confessed on their annual report that revenue decreased by $647.3 million (4.2%). There are a lot of expenses, but not much growth in earnings.

However, does this make Omnicom a bad company? Though investors are concerned about their expensive remodels and acquisitions, stock analysts are suggesting OMC as a Hold investment. A comment shared in their annual report to their investors,

We are driven by out clients’ continuous demand for more effective and efficient marketing activities, we strive to provide an extensive range of advertising, marketing and corporate communication services through various client-centric networks that are organized to meet objectives.

OMC is often compared with NXST (Nexstar Media Group), IPG (Interpublic Group), LAMR (Lamar Advertising Company), CCO (Clear Channel Outdoor) and MCMI (Nationa CineMedia). Yet, despite their poor earnings report, loyal shareholders are holding their investments.

Read: Nexstar Media Groups Takes Action (NXST)

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Author: Black Tea

C.Jackson, creative writing and investor at Black Tea. Building a brand and social network community with investors and entrepreneurs.

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