What happened

Shares of Interpublic Group (NYSE:IPG) surged on Wednesday following the release of the advertising and marketing services provider's fourth-quarter report. Interpublic beat analyst expectations for both revenue and earnings, and it announced a dividend increase and a share buyback program. As of 12:20 p.m. EST, the stock was up about 12%.

So what

Interpublic reported fourth-quarter revenue of $2.34 billion, up 3.5% year over year and $40 million higher than the average analyst estimate. Organic revenue increased 3.3% overall, with a 3.7% increase in the U.S. and a 2.9% increase in international markets. Excluding higher pass-through revenue, organic revenue growth was 2.5%.

A rising stock chart.

Image source: Getty Images.

Adjusted earnings per share came in at $0.79, excluding items related to the Tax Cuts and Jobs Act. That's up from $0.75 in the prior-year period, and $0.02 better than analysts were expecting. Operating expenses grew by just 2.5% during the quarter, leading to a 6.7% surge in operating profit.

In addition to reporting its fourth-quarter results, Interpublic announced a $0.21-per-share quarterly dividend, up from $0.18 per share, as well as a new $300 million share repurchase program.

Now what

Interpublic CEO Michael Roth expects organic growth to continue in 2018: "Looking ahead to 2018, we are targeting organic revenue growth in the range of 2% to 3% and operating margin expansion of 20 basis points over the results we are reporting today, which will build on our strong long-term record of improving profitability. At this level of margin expansion, we will continue to invest behind our talent and in key areas such as digital, data, and analytics, which are vital to positioning us for success this year and for the long-term."

With Interpublic reporting its strongest revenue growth since early 2016, investors had every reason to push up the stock.

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