Wednesday, February 13, 2008

Recession? What Recession?

FORBES--Advertising trends tend to forecast the temperature of the economy as a whole, but after Omnicom Group announced its fourth-quarter earnings it looks like the mercury is rising amidst a snowstorm.

Despite the recent economic downturn and talks of a recession, Omnicom Group (NYSE:OMC), the world's largest advertising services company, announced a 13% increase in quarterly profit on Tuesday to $313.9 million, or 96 cents per share, as compared to $277.2 million, or 81 cents per share, the prior year. The company's worldwide sales were up 12.7% to $3.6 billion from $3.2 billion in the fourth quarter of 2006. International sales grew faster than domestic, with foreign sales up 16.3%, to $1.7 billion, and U.S. sales up 9.5%, to $1.8 billion.

Communications spending often serves as a barometer of how well a company is doing, as firms often sacrifice marketing to cut costs. Omnicom and other major marketing holding companies, like Interpublic Group and WPP, are typically accurate economic indicators because they represent major brands like Pepsi, Anheuser-Busch, and AT&T.


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