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Omnicom (OMC) Q1 Earnings and Revenues Beat Estimates, Rise Y/Y

Zacks Equity Research
·4-min read

Omnicom Group Inc. OMC reported impressive first-quarter 2023 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.

Earnings of $1.56 per share beat the consensus estimate by 13% and our estimates by 11.4%. EPS increased 12.2% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 2.3% and our estimate by 1.4%. The top line increased 1% year over year.

The increase in the top line resulted from an increase of 5.2% in revenues from organic growth, partially offset by a negative impact of 3.2% due to foreign currency translations and a 1% fall in acquisition revenues, net of disposition revenues.

In the quarter, Omnicom witnessed broad-based growth across disciplines, regions and client sectors. Advertising & Media, Precision Marketing and Public Relations were the largest contributors to this growth.

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The company’s shares have gained 18.9% over the past year against the 1% decline of the industry it belongs to and the 7.6% decline of the Zacks S&P 500 composite.

Omnicom Group Inc. Price

Omnicom Group Inc. price | Omnicom Group Inc. Quote

Organic Growth Across Disciplines and Regions

Across fundamental disciplines, revenues from Advertising & Media were up 5.1%, Precision marketing revenues jumped 7%, Execution & Support revenues increased 3.6% and Commerce and Brand Consulting revenues were up 3.3%. Experiential revenues improved 8.4%, Public Relations revenues increased 5.8% and Healthcare revenues increased 4.8%, organically, year over year.

Across regional markets, year-over-year organic revenue growth was 5.1% in the United States, 5.9% in the U.K., 6.6% in Other North America, 5.4% in the Euro Markets & Other Europe, 12.2% in Latin America and 9.5% in the Middle East and Africa. Asia Pacific was up 2.8% year over year.

Margin Performance

EBITA in the quarter came in at $365.8 million, down 1.8% year over year. EBITA margin was 10.6%, down 30 basis points (bps) year over year. Operating profit of $346.5 million decreased 1.8% year over year. The operating margin decreased 30 bps to 10.1%. For 2023, the company expects the operating margin to be at the top of the 15% to 15.4% range.

Omnicom currently carries a Zacks Rank #1 (Strong Buy).

Upcoming Earnings That Warrant a Look

Here are a few stocks from the broader Business Services sector, which according to our model, have the right combination of elements to beat on earnings this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Waste Connections WCN currently has an Earnings ESP of +1.93% and a Zacks Rank of 3. It is scheduled to report first-quarter 2023 results on Apr 26, after market close. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for the bottom line is pegged at 88 cents per share, up 7.3% from the year-ago figure. The consensus mark for revenues is pegged at $1.9 billion, up 15.4% from the figure reported a year ago. WCN delivered an average earnings surprise of 3.53% for the previous four quarters.

Waste Management WM currently has an Earnings ESP of +0.53% and a Zacks Rank of 3. It is scheduled to report first-quarter 2023 results on Apr 26, after market close.

The Zacks Consensus Estimate for earnings is pegged at $1.26 per share, down 2.3% from the year-ago figure. The consensus mark for revenues is pegged at $4.84 billion, up 3.9% from the prior-year figure. WM came up with an average earnings surprise of 4.7% for the previous four quarters.

Aptiv APTV currently has an Earnings ESP of +4.29% and a Zacks Rank of 3. It is scheduled to report first-quarter 2023 results on May 4, before market open.

The Zacks Consensus Estimate for the bottom line is pegged at 86 cents per share, up 36.5% from the year-ago reported figure. The consensus mark for revenues is pegged at $4.51 billion, up 7.9% from the prior-year reported figure. APTV delivered a negative earnings surprise of 8.7% on average for the previous four quarters.

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Omnicom Group Inc. (OMC) : Free Stock Analysis Report

Waste Management, Inc. (WM) : Free Stock Analysis Report

Waste Connections, Inc. (WCN) : Free Stock Analysis Report

Aptiv PLC (APTV) : Free Stock Analysis Report

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Zacks Investment Research