PARIS, Oct 22 (Reuters) - Publicis sales slowedmarkedly in the third quarter, hurt by weakness in the UnitedStates where customers delayed or cut marketing projects,forcing it to cut its annual organic growth target to 1 percentfrom 2.5 percent.
The results are the latest setback for the world'sthird-biggest advertising agency by sales, which has beenlagging competitors like WPP and Omnicom interms of growth and fighting to retain key customers likeProcter & Gamble amid an unprecedented slew of contractreviews.
Chief Executive Maurice Levy said the unexpected slowdownstarted in September and affected multiple customers in theUnited States in the automobile, pharmaceutical, and consumergoods sectors, although he declined to provide specifics.
"It's not just one company or one contract that caused thedisappointing quarter - things were simply not as good as theyneed to be in the United States," said Levy. Latin America wasalso weak because of Brazil's recession.
Third-quarter sales were 2.33 billion euros, giving anorganic growth rate of 0.7 percent, compared with 1.4 percent inthe second quarter and 0.9 percent in the first.
Analysts had been expecting organic sales growth of 2.1percent in the third quarter, according to a company-providedconsensus.
The results were weaker than number two Omnicom,which reported third-quarter organic sales growth of 6.1 percenton improved margins, but where the dollar's strength caused a1.1 percent fall in reported revenues to $3.7 billion.
Interpublic Group also outpaced Publicis on organicsales growth of 7.1 percent and reported sales growth of 1.3percent on revenue of $1.87 billion.
Asked to explain the lag with peers who are also heavilyexposed to the U.S. market, Levy said there were differences inthe client portfolios, and that Publicis' higher proportion ofdigital business meant customers could more easily delay oralter projects.
(Reporting by Leila Abboud; Editing by Andrew Callus)
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