U.S. advertising holding company Omnicom Group has reported a fourth-quarter loss of about $941m within its public relations business, marking the company’s first financial update since completing its roughly $25 billion acquisition of Interpublic Group (IPG) in late November.
According to reports from the mainstream, the latest earnings from Omnicom Group offer the first real look at the financial impact of its acquisition of Interpublic Group, highlighting both the cost of integration and the scale of the company’s ambitions.
In the fourth quarter, Omnicom reported revenue of $5.5 billion, representing an increase of roughly 27.9% compared with the same period a year earlier. Despite that strong top-line growth, the company posted a net loss of $941m for the quarter under GAAP accounting, largely due to expenses tied to completing and integrating the deal.
That loss translated to a diluted loss per share of four dollars and two cents. On an adjusted basis, however, Omnicom reported earnings of $2.59 per share, reflecting the underlying performance of the business after excluding acquisition-related charges.
Profitability also showed up in adjusted operating performance. The company generated adjusted EBITA of about $928.9m in the quarter, producing a margin of approximately 16.8%.
For the full year, Omnicom recorded total revenue of $17.3b, representing year-over-year growth of about 10.1%. However, after accounting for acquisition-related costs, the company ended the year with a net loss of $54.5m on a GAAP basis.
Adjusted performance for the year remained solid. Omnicom delivered approximately $2.7b in adjusted EBITA, equal to a margin of about f15.6%. Adjusted earnings per share for the year came in at $8,65.
Much of the fourth-quarter loss was driven by charges associated with the acquisition. These included roughly $1.1b in repositioning costs, a loss of about $543.4m related to planned asset dispositions, and approximately $186.7m in transaction expenses connected to the IPG deal.
CEO John Wren said the company has already begun reshaping the combined organisation since the transaction closed on November 26. According to Wren, Omnicom has made key leadership and brand announcements, refreshed its enterprise growth strategy, and rolled out the next generation of its Omni data and technology platform.
He also outlined three immediate priorities for the newly expanded company. The first is simplifying and aligning the business around Omnicom’s “Connected Capability” model. The second is significantly increasing the expected savings from the merger, with the company doubling its total cost-synergy target to $1.5b, including about $900m expected in 2026. The third is returning capital to shareholders, highlighted by the authorisation of a $5b share buyback program that includes a $2.5b accelerated repurchase.
The results underscore the balancing act Omnicom now faces: absorbing the short-term financial impact of the largest deal in its history while positioning the combined organisation for long-term growth across advertising, media, data, and technology.