WPP’s shares dive after rival Publicis’ earnings fall
London-based global advertising group WPP saw it shares fall by more than seven per cent as sentiment hit the sector after lower than expected fourth quarter numbers from rival Publicis shocked the market.
Publicis, which trades on the Euronext Paris stock exchange, saw its shares plunge 15 per cent after it reported its earnings. This, despite the fat the company actually increased its operating margins to 16.7 per cent.
The advertising industry is in the grip of a shift as big spending consumer goods companies like Unilever and Proctor & Gamble ease off on their advertising budgets and as advertising shifts from traditional outlets to digital platforms.
WPP’s share price has more than halved over the past two years, although the shares are up nearly three per cent since the start of this year.
It's proving a tough start for relatively new CEO, Mark Read, only took over the top job at WPP late last year, following the acrimonious departure of long time boss Martin Sorrell.
The company lost a very longstanding account with global auto maker Ford, and it has also asked Sorrell to pay back some £200,000 worth of expenses.
Amid all this, Read is tasked with modernising the advertising behemoth by cutting jobs, simplifying its structure and increasing investments.