US economic uncertainty could hit growth says Sorrell

LONDON - Sir Martin Sorrell has told investors that uncertainty over what will happen with the US economy next year could impact on WPP Group's earnings in 2005.

Speaking at the Credit Suisse First Boston media and telecoms conference in New York, WPP chief executive Sorrell said that the company expected to see 15% growth in earnings in 2004 but that the growth in 2005 and 2006 could be between 10% and 15%, depending on the US economy.

The US dollar is depressed at the moment, due to fears over its enormous budget deficit. Sir Martin warned the conference that when America sneezes, "we all catch a cold".

He said: "A negative factor next year will be what's happening in America, whether the economy will be under control."

Shares in WPP were trading down slightly in London this afternoon, falling 0.5%, or 3p, to trade at 572.5p.

Speaking at the same conference, Interpublic Group CEO David Bell said it was on track for an operating margin of 12%-15% even if organic revenue growth trailed the US economy.

"We have not assumed anything other than low single-digit, sub-GDP organic growth. If we beat that, it becomes easier, but that's how we see the turnaround," Bell said.

He said Interpublic would narrow the organic revenue gap with rivals as the restructuring at the holding company, which has seen it report a loss for the last seven quarters, nears an end.

He said he saw no additional restructuring ahead despite a series of account losses, mainly at Lowe Worldwide and Initiative Media.

He also denied reports Interpublic was considering a joint venture media-buying tie-up with troubled Havas.

"We feel confident that media will not be an issue for us whatsoever, nor do we require a joint venture," he said.

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