Stock to watch: Omnicom Group Inc. (NYSE: OMC)

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Omnicom Group Inc. (NYSE: OMC) stock rose 0.5% (as of 12:33 pm GMT-4; Source: Google finance) after the company posted mixed results for the third quarter of FY 19. Net income attributable to the company fell to $290.2 million, in the third quarter ended Sept. 30, from $298.9 million, a year earlier. OMC in the third quarter of 2018 includes a net after tax increase of $18.2 million due to the net gain on dispositions of certain subsidiaries, less charges in connection with repositioning actions and an increase to income tax expense for adjustments related to the 2017 provisional amounts for the effect of the Tax Cuts and Jobs Act.

OMC in the third quarter of FY 19 has reported the adjusted earnings per share of $1.32, beating the analysts’ estimates for the adjusted earnings per share of $1.31 per share, according to IBES data from Refinitiv. The company had reported 2.4 percent fall in the adjusted revenue to $3.62 billion in the third quarter of FY 19, missing the analysts’ estimates for revenue of $3.65 billion. The company also reported a 2.2% increase in revenue from organic growth while the analysts on average had expected a 2.75% gain, according to four analysts polled by Refinitiv IBES. Adjusted operating profit in the third quarter of 2019 was flat when compared to the third quarter of 2018, while operating margin for the third quarter of 2019 increased to 13.1% when compared to 12.7% for the third quarter of 2018.

OMC posted organic growth in the five fundamental disciplines. Advertising increased 3.4%, CRM Consumer Experience increased 1.8%, CRM Execution & Support decreased 1.5%, Public Relations decreased 3.8% and Healthcare increased 9.5%. Across the regional markets, organic growth in the third quarter of 2019 as compared to the third quarter of 2018 was: 2.7% in the United States, 2.7% for Other North America, 3.0% in the United Kingdom, 1.6% for the Euro Markets and Other Europe, 0.4% for Asia Pacific and 6.6% for Latin America while the Middle East and Africa decreased 4.5%. On the back of the negative effects of foreign exchange rates and disposition activity in excess of acquisitions over the past year, OMC’s worldwide revenue in the third quarter of 2019 fell 2.4% to $3,623.8 million from $3,714.3 million in the third quarter of 2018.

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