Interpublic reports losses of $327m

Interpublic's woes continued this week as it posted third-quarter losses totalling $327 million for the three months to the end of September.

The losses - which are more than three times the loss of $89.6 million for the same period last year - would have been worse but for the sale of Interpublic's research business NFO WorldGroup to Taylor Nelson Sofres.

Operating losses were $416.2 million but the $89.1 million gain received on the NFO sale provided some respite.

The losses were mainly due to the $127.6 million set aside in stock to pay pending legal actions from shareholders after accounting scandals between 1997 and 2001 led to a restatement of Interpublic's earnings.

Interpublic, which owns networks including Lowe, McCann-Erickson and Initiative Media, announced an increase in revenue of 2.3 per cent to $1.4 billion.

It said that a restructuring programme, which could involve up to 4,000 job losses, will be completed in the first quarter of 2004. It expects the restructuring to generate annual savings of $150 million.

David Bell, the chairman and chief executive of Interpublic Group, said: "We are moving aggressively to put issues behind us, while simultaneously positioning our company for future growth.

"We are also pleased to see a firming in the economy. Interpublic has obvious untapped earnings power and a range of opportunities to unlock its potential."

Interpublic pointed to its appointment of new financial officers and management changes at Lowe and McCann in the UK as evidence of its intention to move forward.

During the third quarter FCB won the $225 million US KFC account and Initiative picked up some of the France Telecom media business.

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