WPP Group (WPPGY), one of the biggest advertising holding companies in the world, on Monday reported strong revenue growth for the third quarter in the face of mounting fears of an ad spending slowdown.
London-based WPP, which just wrapped up its $4.8 billion acquisition of Young & Rubicam, said third-quarter revenue rose 26%, aided by increased spending by its North American and European clients on advertising and consulting.
Revenue rose to 679.4 million pounds ($988 million) from 537.8 million pounds ($781 million) in the same period a year ago. North American revenue rose 30% to 309.5 million pounds ($449 million), while revenue gained 27% in continental Europe to 122.1 million pounds. The company's public relations unit, which includes Hill & Knowlton, posted growth of 45%.
Shares of WPP, which now owns three of the world's 11 biggest advertising agencies, rose $1.88 to $62.50 in afternoon trading.WPP added $1.2 billion in new business in the quarter, 14% more than the $1.1 billion it grabbed in the year-ago period. Clients like Ford (F) and Nike (NKE) handed WPP new assignments, and the company added Goldman Sachs (GS), Motorola (MOT) and Sun Microsystems (SUNW) to its roster of clients. The deal to acquire Y&R -- the largest in the history of the ad industry -- enabled WPP to lay claim to three of the 11 biggest agencies in the world. The company also owns Ogilvy & Mather Worldwide and J. Walter Thompson. On a pro forma basis, WPP said that combined revenue for the nine months would have risen more than 19% from the same period last year. Gareth Thomas, analyst with Commerzbank, called the results "excellent." "Concerns about