The advertising network issued a statement on 24 June saying that revenues for the first five months of 2002 were down by 2 per cent and that it would be "difficult to achieve its profit margin target of 15 per cent for 2002.
Philip Lader, WPP's chairman, said: "Our view continues to be that recovery will be gradual; saucer- or bath-shaped, rather than 'U-', 'V-' or 'W-'shaped, and will be American-led. 2002 will be better than 2001, and 2003 better than 2002, but pronounced recovery will have to wait until the US Presidential elections and the 2004 Olympics."
Shares in WPP fell by 7 per cent on Monday in response to the announcement, before rallying on Tuesday. Analysts had been expecting WPP to improve on its 14 per cent operating margin last year.
WPP has been hardest hit in North America, with revenues down by more than 6 per cent in the first five months. In Europe revenues were up by 5 per cent, but the UK was flat. Lader said the impact of the world economic recession and 11 September was still being felt. WPP's PR and public affairs companies have been hardest hit.