The charges relate to the way Interpublic's McCann-Erickson advertising network had reported inter-company sales in Europe, and Interpublic will now review its accounting procedures and financial staff in its European operations.
The news came as Interpublic, which also owns Foote, Cone & Belding and Weber Shandwick Worldwide, the world's biggest PR network, said profits for the second quarter were lower than expected. It reported operating profit of $238.5m, a drop of 1.3% from the figure of $241.7m for the same period in 2001. The operating margin dropped from 16.1% to 14.8% for the quarter.
In a statement, Interpublic said that the charges did not affect the company's cash position, with Interpublic CEO John Dooner saying: "The restating will have no impact on the company's operating performance going forward."
Shares in Interpublic closed down 5.23% on the New York Stock Exchange last night at $15.78, before the announcement. In after-hours trading, shares hit a low of $14.30, before rebounding to $15.79.
Overall revenue for the quarter, ending June 30, was down by 8.4% to $1.61bn.
Chief financial officer Sean Orr said: "Our core businesses performed as expected in the second quarter, but we were penalised by poor results at certain sports properties within our Octagon unit and recognition of asset impairment charges for those properties."
Looking forward, Interpublic said that it expects revenues for the third quarter to decline by between 5% and 7% compared with the same period in 2001. It said that the market remained volatile, and that visibility was uncertain. "Although many clients have increased their forward commitments for network advertising time, Interpublic's agencies have yet to see a related change in demand for their services," the statement said.
The company made the announcement yesterday, after delaying an earnings call originally scheduled for August 6. Shares dropped 24% on that news, before recovering some of their value on being upgraded by JP Morgan.
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