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Tickers in this Article: OMC
Omnicom Group (NYSE:OMC) will release its third quarter earnings on Tuesday, October 16, 2012. Analysts have become increasingly bearish on the company over the last month, with the consensus analyst estimate slipping from 76 cents a share to the current prediction of earnings of 74 cents a share.

Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: Can Earnings Guidance Accurately Predict The Future?

What to Expect: Analysts are expecting Omnicom Group to report earnings of 74 cents per share, up 2.8% from a year ago, when the company reported earnings of 72 cents per share.

This is a drop from the consensus estimate three months ago of 79 cents. Analysts are projecting earnings of $3.63 per share for the fiscal year.

Revenue is expected to exceed last year's figure of $3.38 billion by 0.9% and come in at $3.41 billion for the quarter. Omnicom Group is expected to report revenue of $14.28 billion for the fiscal year.

Company Performance: Revenue has risen for four consecutive quarters now. It rose 2.1% in the second quarter, 5% in the first quarter, 7.4% in the fourth quarter of the last fiscal year and 12.9% in the third quarter of the last fiscal year.

Compared to the industry average of 13.54, OMC's P/E ratio of 15.3 is quite high. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Understanding The P/E Ratio

The stock price has risen from $48.55 on July 13, 2012 to $51.75 over the past quarter. Omnicom Group's best recent streak was when its price gained $3.34 per share between August 23, 2012 and September 19, 2012.

The Competition: Omnicom Group provides professional, advertising, marketing, and corporate communications services. Eleven of 17 analysts rate Omnicom Group a hold. They have grown a bit more optimistic about the stock, as the number of buy ratings has inched up over the past three months.

The company's closest competitor in the advertising industry is Interpublic (IPG). Analysts are less optimistic about Omnicom Group than about Interpublic. Thirteen out of 17 analysts rate the latter a buy compared to six of 17 for the former.

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