Shares of The Interpublic Group of Companies (NYSE:IPG) are soaring today after the company reported second-quarter earnings that surpassed analyst expectations. As of 12:09 p.m. EDT on Wednesday, the stock is up 11.4%.
The Interpublic Group (IPG) is a global advertising and marketing services company. In the second quarter, IPG's revenue increased 22.5% year over year to $1.85 billion, while adjusted EPS hit $0.70. The consensus EPS estimate going into the quarter was $0.43. Beating EPS estimates by $0.27 is likely a big reason the stock is up so much today.
Along with the second-quarter release, management upgraded IPG's full-year guidance for organic revenue growth to a range of 9% to 10%. The company makes numerous acquisitions, so organic revenue growth will typically come in slower than overall revenue growth. This boost in guidance is likely another reason the stock is climbing today.
IPG has struggled over the last two decades after crashing in 2000 along with the bursting of the internet bubble. But over the last 12 months, the stock has shown signs of life, rising more than 100% after putting up some impressive earnings reports.
This is good news for existing shareholders, but zooming out, the company's trailing-12-month net income is actually down from 10 years ago, which is not a good sign for the health of the business over the long term. This could change, but until it does, there's no reason to think IPG's recent stock performance can continue over the next few years.