WPP Shares Suffer Biggest Drop In 17 Years Amid Revenue Forecast Concerns
British advertising company WPP shares had their "biggest drop in 17 years" after the company "cut its full-year revenue forecast amid lower spending by customers, in particular consumer-goods manufacturers," according to Joe Mays of BLOOMBERG. The stock fell as much as 13% after WPP said that "like-for-like revenue growth is expected" from 0-1% in '17, down from an earlier 2% forecast. Ad companies worldwide are "being hit" as big clients like Unilever and Proctor & Gamble "focus on cost-cutting to cope with sluggish global economic growth and technological disruption." WPP "singled out ad spending on consumer goods" as "coming under particular pressure." Unilever, one of WPP's biggest customers, said earlier this year that it would "cut ad output" by 30% and "halve the number of creative agencies it works with to 1,500 from 3,000." That followed a "failed takeover bid" by Kraft-Heinz. WPP CEO Martin Sorrell said, "That sent a shock-wave through the industry. It obviously had an effect in terms of people spending, particularly in the packaged goods sector." WPP, which also works for brands such as Ford and Marks & Spencer, has already seen its shares fall 12% this year through Tuesday "amid a difficult economic climate and pressure on its businesses in North America." It is now down more than 20% year-to-date. Its biggest rivals, including Interpublic Group, Publicis Groupe and Omnicom Group, are "each down" more than 8% this year. WPP shares on Tuesday fell as low as 1,382 pence and were down 11% to 1,420 pence on Tuesday afternoon (BLOOMBERG, 8/23).