(Bloomberg) --
Publicis Groupe SA maintained its revenue outlook for the year in a sign the ad agency network's prospects may be improving after a disastrous 2019. Its shares rose 2.6%.
- Publicis issued organic net revenue guidance ranging from a 2% decline to a 1% expansion this year, similar to a previous forecast in October. Organic revenue in the fourth quarter fell 4.5%, the Paris-based company said in a statement. Analysts were expecting a 4.9% drop, according to a company-compiled consensus.
Key Insights
- A push toward digital marketing has yet to make up for a slump in the kind of traditional ads found on TV and billboards, leading to a succession of negative earnings surprises from the ad group last year.
- Publicis said a “sequential improvement will be visible fairly rapidly.” It still sees a tough start to 2020, with business continuing to decline in the first quarter.
- Traditional ad spending cuts from U.S. consumer brands seems to be “peaking although we cannot see it yet in the numbers,” Chief Executive Officer Arthur Sadoun said in a call with reporters on Thursday.
- Sadoun is under pressure to show positive results from Sapient and Epsilon, two ad tech businesses acquired in 2015 and 2019.
Market Reaction
- Publicis stock, which tanked after three of its four most recent results statements, rose as much as 2.6% in early trading. The stock had lost more than a quarter of its value in the past 12 months, underperforming rivals WPP Plc, Omnicom Group Inc. and Interpublic Group of Cos. Inc.
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- Publicis net revenue rose to 2.87 billion euros ($3.16 billion) in the fourth quarter. Analysts were expecting 2.79 billion euros.
To contact the reporter on this story: Angelina Rascouet in Paris at arascouet1@bloomberg.net
To contact the editor responsible for this story: Thomas Pfeiffer at tpfeiffer3@bloomberg.net
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