Interpublic, which owns McCann-Erickson WorldGroup and the Lowe Group, saw its shares fall 4.7% or $1.14 to close at $23.01 on the New York Stock Exchange. At one point, it had been trading as low as $22.69.
Merrill analysts cut its projected earnings for the firm from 42 cents per share to 40 cents. The bank, however, maintained its 2002 earnings per share estimate of $1.48 per share, with a revenue decline of 2%.
Last month, Interpublic financial officer Sean Orr, despite saying it saw some signs of recovery in the ad market, said that second-quarter revenue was still likely to be lower than last year, but that the decline would not be as steep as the 13.8% fall in the first quarter.
Orr said: "We certainly hope revenues will be flat for the year, but that means that second-half revenues would have to show double-digit growth. We'd like to see that but we're not committing to it."
Like other major advertising stocks including WPP, Interpublic has seen its stock tumble in recent weeks on the back of accounting scandals in the US and the trouble affecting its main US rival Omnicom, which finds itself fighting a number of lawsuits over the way it has account for various internet assets.
When the group reported its first-quarter results in May, Interpublic chairman and CEO John J Dooner said that the firm was seeing growing momentum in the area of new business, where it posted $745m of net wins, up from $223m in the previous quarter.
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