[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / October 21, 2016 / Active Wall St. announces its post-earnings coverage on Omnicom Group Inc. (NYSE: OMC). The company posted its financial results for the third quarter fiscal 2016 (Q3 FY16) on October 18, 2016. The New York-based company recorded a 2.3% y-o-y growth in its worldwide revenue and 9.3% rise in its diluted net income per common share during the reported quarter. Register with us now for your free membership at: http://www.activewallst.com/register/.
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Earnings Reviewed
During the quarter ended on September 30, 2016, Omnicom reported revenue of $3.79 billion compared to $3.71 billion recorded at the end of Q3 FY15. The market had expected the company to report total revenue of $3.78 billion. In the reported quarter, organic growth helped Q3 FY16 revenues to rise 3.2%, while acquisitions added another 0.4% to revenues during the same time period. However, revenues suffered from a 1.3% negative impact from foreign exchange translations.
The application software developer reported net income of $253.8 million, or $1.06 per diluted share, in Q3 FY16 compared to a net income of $236.8 million, or $0.97 per diluted share, in Q3 FY15. Net income numbers for Q3 FY16 outperformed market expectation of $1.03 per diluted share.
Operating-Metrics
In Q3 FY16, Omnicom's operating income increased by $24.8 million, or 5.8% y-o-y to $453.1 million from $428.3 million in Q3 FY15. Operating margin for Q3 FY16 came in at 12.0% of revenues versus 11.6% of revenues in the year ago comparable period. The company's Q3 FY16 EBITA grew $27.4 million, or 6.0%, to $482.1 million from $454.7 million in Q3 FY15. Additionally, EBITA margin improved to 12.7% in Q3 FY16 from 12.3% in the previous year's quarter.
Revenue by Discipline
For Q3 FY16, advertising discipline reported a 3.6% y-o-y rise in its revenue to $1.97 billion, contributing 52.0% to total revenues. Furthermore, the discipline also reported a 3.6% growth in the company's organic revenue.
CRM discipline, which contributed 31.8% to total revenues during Q3 FY16, reported revenues of $1.20 billion, down 1.4% on y-o-y basis. However, the discipline's organic revenues improved 1.6% y-o-y.
The company's PR discipline contributed 9.2% to total revenues during Q3 FY16 and registered a 5.5% y-o-y growth to report revenues of $347.6 million. Additionally, the segment's organic revenue advanced 4.4% y-o-y during the reported period.
Omnicom's specialty division's revenue improved 5.9% y-o-y in Q3 FY16 to $266.9 million. Furthermore, the division contributed 7% to the company's total revenue and reported a 6.2% y-o-y organic revenue growth in Q3 FY16.
Regional Contribution
During the reported quarter, revenues from North America were $2.25 billion, contributing 59.4% to the total revenues of the company. The region registered a 1.4% increase y-o-y in its quarterly revenues, while organic revenue grew 1.7% y-o-y in Q3 FY16.
Euro Markets & Other Europe contributed 15.6% to the company's total revenue and reported revenue of $590.7 million in Q3 FY16, growing 2.0% y-o-y. The region's organic revenue growth was also 2% y-o-y in Q3 FY16.
In Q3 FY16, revenues from Asia/Pacific region grew 8.3% y-o-y to $418.9 million. The segment contributed 11.0% to the company's total revenue and reported an 8.0% y-o-y organic revenue growth.
Revenues from U.K. declined 10.4% y-o-y to $347.9 million in Q3 FY16, as the dollar appreciated against British pound amid fears of the Brexit. However, the region's organic revenue growth was 5.2% y-o-y and contributed 9.2% to total revenues during the reported quarter.
Latin American region's revenue surged 60.0% y-o-y to stand at $112.5 million in Q3 FY16. Furthermore, the region's contribution to the company's total revenue was 3.0% and it had reported a strong organic growth of 11.9% y-o-y in the quarter ended September 30, 2016.
Omnicom generated 1.8% of its total revenues from Africa-Middle East regions, which registered an 11.3% y-o-y growth to end the quarter at $67.2 million. Furthermore, the region's organic growth was 15.6% y-o-y, in Q3 FY16.
Cash Flow & Balance Sheet
During the first nine months of FY16, Omnicom's cash flow from operations came in at $316.6 million compared to $440.8 million in the previous year's comparable quarter. At the close of books on September 30, 2016, Omnicom had $1.94 billion in cash and cash equivalents compared to $2.61 billion at the close of books on December 31, 2015. Additionally, the company's long-term debt increased to $5.01 billion as on September 30, 2016, from $3.56 billion as on December 31, 2015.
Stock Performance
Omnicom Group's stock is trading slightly down by 0.88%, closing Thursday's session at $79.63 on volume of 2.84 million shares, which was higher than its 3-month average volume of 1.29 million shares. The company's shares gained 7.31% since the beginning of the year. Additionally, the stock has advanced 12.27% in the last twelve months. The company's shares are trading a PE ratio of 17.22 and have a dividend yield of 2.76%.
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