Second Quarter Earnings of Omnicom Group Inc (NYSE:OMC) Surpassed All the Estimates.

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By Hanson So on July 23, 2014 Technology & Software

Omnicom Group Inc (NYSE:OMC) recently posted its earnings for the second quarter of the year 2014. There was a huge increase in the revenues of the company and the net income increased to $325.2 million with an EPS of $1.23. The company had a net income of $289.5 million and an EPS of $1.09 for the last fiscal year. The adjusted earnings were recorded to be at $1.26, surpassing the Zacks consensus of $1.17.

Revenues for the recent quarter increased by 6.4 percent, on a yearly basis, and reached the figures of 3,870.9 million, beating the Zacks consensus of $3,796 million. This increase in revenues resulted from an increase in the domestic sales as well as the international sales: domestic sales increased by 7.8 percent and reached to $2,053.3 million whereas international sales increased by 4.9 percent and reached to $1,817.6 million, over the year.

Although the acquisitions had a negative impact on the revenues of Omnicom Group Inc (NYSE:OMC), but the growth in organic products and effects of foreign exchange rates filled the gap.

Advertising revenues were up by 10.5 percent, on yearly basis, and reached the figures of $1,944.6 million whereas customer relationship management revenues increase by 1.1 percent and reached the figures of $1,298.3 million. The revenues from public relations were recorded to be at $357 million whereas the specialty revenues were recorded to be at $271 million with an increase of 0.2 percent.

Coming to the company’s performance over different geographical areas, the company saw a growth of 7.9 percent in the region of North America whereas the business shot up by 7.8 percent in Latin America. In the areas of Asia and Europe, business was increased by 5.1 percent and 2.1 percent respectively

For the first six month of the year 2014, Omnicom Group Inc (NYSE:OMC) had a free cash flow of $759.4 million. The company’s cash flow for the prior year was recorded to be at $702.2 million. The debt of the company increased by 12 million over a period of one year; currently the debt of the company is at $4,063. The company repurchased some of its shares in the second quarter under the program of buyback. Sources have it that the repurchase deal was worth $7.6 million.

Omnicom Group Inc’s (NYSE:OMC) return on equity is recorded to be at 31.5 percent. During the period of 6 months, the company has distributed around 100 percent of its net income in the forms of share repurchases and dividends.

Omnicom Group Inc (NYSE:OMC) terminated its $35 billion merger deal with Publicis Groupe SA (PUBGY) in May, 2014. The reasons for the cancellation were recorded to be management issues and conflicts, transactional issues and managerial problems. The earnings of Omnicom Group Inc (NYSE:OMC) suffered from a $1.8 million pre-tax bill that the company had to pay in relation to its merger deal.

Omnicom Group Inc (NYSE:OMC) has a #2 rank, with a rating of ‘buy’ on its stocks by Zacks. The company’s business is constantly increasing in the areas of Asia, North American, Africa and Latin America.