Omnicom Reports Second Quarter 2004 Results

NEW YORK, Jul 27, 2004 /PRNewswire-FirstCall via COMTEX/ -- Omnicom Group Inc. (NYSE: OMC) today announced that net income for the second quarter of 2004 increased 15% to $206.1 million from $180.0 million in the second quarter of 2003. Diluted earnings per share in the second quarter of 2004 increased 15% to $1.10 per share from $0.96 per share in the second quarter of 2003.

Worldwide revenue increased 12% to $2,407.8 million from $2,149.5 million in the second quarter of 2003. Domestic revenue for the second quarter of 2004 increased 11% to $1,312.2 million compared to $1,182.2 million in 2003. International revenue increased 13% to $1,095.6 million compared to $967.3 million last year.

Net income for the six months ended June 30, 2004 increased 16% to $341.7 million from $295.6 million in 2003. Diluted earnings per share increased 15% to $1.81 per share in 2004 from $1.58 per share in 2003.

Worldwide revenue for the six months ended June 30, 2004 increased 14% to $4,639.2 million from $4,086.8 million in 2003. Domestic revenue for the six months ended June 30, 2004 increased 11% to $2,533.4 million compared to $2,281.8 million in 2003. International revenue for the six months ended June 30, 2004 increased 17% to $2,105.8 million compared to $1,805.0 million in 2003.

In accordance with SFAS No. 123, "Accounting for Stock Based Compensation," as amended by SFAS 148, "Accounting for Stock-Based Compensation -- Transition and Disclosure, an amendment for FASB Statement No. 123", we elected, effective January 1, 2004, to account for stock-based employee compensation using the fair value method. As a result, the fair value of stock-based employee compensation, including unvested employee stock options issued and outstanding, were recorded as an expense utilizing the retroactive restatement method as set forth in SFAS 148. Accordingly, our results for the quarter and six months ended June 30, 2003 have been restated as if we used the fair value method to account for stock-based compensation.

Omnicom Group Inc. (NYSE: OMC) ( http://www.omnicomgroup.com ) is a leading global advertising, marketing and corporate communications company. Omnicom's branded networks and numerous specialty firms provide advertising, strategic media planning and buying, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 100 countries.

For a live webcast and/or a replay of our first quarter earnings conference call, go to http://www.omnicomgroup.com/InvestorRelations.

     Omnicom Group Inc.

     (Unaudited)
     (In Millions of Dollars, Except Per Share Data)

    Three Months Ended June 30                        2004           2003 (a)

    Revenue                                         $2,407.8       $2,149.5

    Operating expenses                               2,064.1        1,830.2

    Operating income                                   343.7          319.3

    Net interest expense                                 7.3           12.9

    Income before income taxes                         336.4          306.4

    Income taxes                                       113.1          104.0

    Income after income taxes                          223.3          202.4

    Equity in affiliates                                 4.9            1.9
    Minority interests                                 (22.1)         (24.3)

    Net income                                        $206.1         $180.0


    Earnings per share
         Basic                                         $1.10          $0.96
         Diluted                                       $1.10          $0.96


    Weighted average shares (in millions)
         Basic                                         186.8          187.2
         Diluted (b)                                   188.2          187.2

    Dividend declared per share                       $0.225         $0.200

     (a) In accordance with the adoption of SFAS No. 123, as amended by
         SFAS 148, on January 1, 2004 we restated our quarterly financial
         information for the quarter ended June 30, 2003 as if we had used the
         fair value method to account for employee stock compensation
         beginning January 1, 2003.

     (b) Diluted earnings per share for 2004 and 2003 was calculated using an
         assumed increase in net income of $224.4 thousand and $302.0
         thousand, respectively, related to the after-tax compensation expense
         from dividends on restricted shares.


     Omnicom Group Inc.

     (Unaudited)
     (In Millions of Dollars, Except Per Share Data)

    Six Months Ended June 30                           2004         2003 (a)

    Revenue                                         $4,639.2       $4,086.8

    Operating expenses                               4,066.1        3,565.2

    Operating income                                   573.1          521.6

    Net interest expense                                17.7           21.2

    Income before income taxes                         555.4          500.4

    Income taxes                                       186.7          171.1

    Income after income taxes                          368.7          329.3

    Equity in affiliates                                 7.3            4.4
    Minority interests                                 (34.3)         (38.1)

    Net income                                        $341.7         $295.6


    Earnings per share
         Basic                                         $1.82          $1.58
         Diluted                                       $1.81          $1.58

    Weighted average shares (in millions)
         Basic                                         187.3          186.9
         Diluted (b)                                   188.8          186.9

    Dividend declared per share                       $0.450         $0.400

     (a) In accordance with the adoption of SFAS No. 123, as amended by
         SFAS 148, on January 1, 2004 we restated our financial information
         for the six months ended June 30, 2003 as if we had used the fair
         value method to account for employee stock compensation beginning
         January 1, 2003.

     (b) Diluted earnings per share for 2004 and 2003 was calculated using an
         assumed increase in net income of $423.9 thousand and $603.9
         thousand, respectively, related to the after-tax compensation expense
         from dividends on restricted shares.

SOURCE Omnicom Group Inc.

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