UPDATE: WPP Rises As Third Quarter Revenues Beat Hopes

LONDON (Alliance News) - Advertising giant WPP PLC Thursday said revenue growth accelerated in the third quarter to 7.4%, well above analysts' forecasts, as US and UK advertsising markets continue to recover strongly, and it revised its full-year revenue forecast higher.

The company reported like-for-like growth of 5% at constant currencies, up from 2.4% in the in the first half of the year. Total revenues were GBP2.68 billion, up 7.4%. At constant currencies the growth was 6.4%, up from 5.5% in the first half of the year.

It said it now expects full-year revenue growth of over 3%, compared with a previous forecast for 3%.

WPP is outstripping its peers and growing well beyond expectations, said Numis Securities analyst Paul Richards, who was encouraged with the growth in developed markets. Liberum Capital, which has a Buy rating on the stock, expects other analysts to upgrade earnings per share forecasts.

Shares in WPP were trading up 2.3% at 1,343.00 pence Thursday morning, the biggest gainer on the FTSE 100.

The company said it had seen particularly strong growth in North America, the UK and Latin America during July and September, although it also noted that it was comparing with a particularly weak September for the whole industry in 2012.

Except for public relations and public affairs, all regions and business sectors had seen strong growth, WPP said.

The company said its full year margin target remains 15.3%, after reporting a margin improvement of 0.5 points in the first nine months of the year.

It expects like-for-like growth in all regions and business sectors in the full year, with improving trends in the US and fast growing markets in the Asia Pacific, Latin America, Africa, the Middle East and Central and Eastern Europe offsetting slower growth rates in the UK and Western Continental Europe.

It reported net new business of USD3.72 billion during the third quarter, up from USD1.42 billion a year earlier, bringing the total for the first nine months to USD7.9 billion, up from USD5.38 billion.

It said the US Government shut down earlier this month had a limited impact so far on the country's economy, but warned that the failure to come up with a long-term solution continued to make clients reluctant to take risks.

By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews

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