The Interpublic Group of Companies' shares hit a low of $8.60 during the day, before regaining some ground to close at $8.85. Previously the lowest closing price had been $8.88, recorded in July 1993. The price stayed steady in after-hours trading.
Joseph Stauff, an analyst at Credit Suisse First Boston, cut his estimate on Interpublic's earnings per share for 2003 from $1 a share to 88 cents. He said that he was cutting the estimate because of the cost to Interpublic of negotiating a new credit facility, with the company borrowing an extra $500m (拢309m) on Monday, and also because it had lost the Coke Classic account.
Last week, Coca-Cola revealed that it had moved Coke Classic to WPP Group's Berlin Cameron/Red Cell in New York, after rumours that it had been unhappy with the Interpublic-owned McCann-Erickson's work on the account for some time.
However, the loss of the Coke work seems small fry compared with the woes that have plagued Interpublic since last summer. While all the advertising groups have had to contend with the recession, Interpublic has also had to deal with accounting problems, leading to a restatement of $181.3m in earnings, and a subsequent investigation from the US Securities & Exchange Commission as well as lawsuits from shareholders.
In the past month, five analysts have revised their earnings forecasts down for Interpublic, with an average EPS forecast of 91 cents and a low of 82 cents.
Across the board, advertising share prices were suffering in the US. Havas, the French advertising group with a listing on Nasdaq, fell by 5.48% to $3.45 after revealing that revenues for 2002 were down by 5.8%. Omnicom Group was down by 2.25% at $53.54 -- a fall of $1.23, while WPP Group, which has a listing on Nasdaq, was down by 2.3% to $30.91, a fall of 73 cents.
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