The earnings were okay with growth in revenues and net income. Strong digital spending and better than expected results in emerging markets, helped the company achieve reasonably good performance. Both the revenue and net income increased by more than 2%, and the operating margins improved from 14.2% to 14.4%. Growth in China, India, Hong Kong, Singapore, Thailand, Malaysia and Indonesia was better than expected. The stock has corrected a bit after the earnings, and is now about 10% below the 52 week high of $70 made just before the results. Still, the stock has done reasonably well over the last one year with 24% appreciation. The dividend yield of 2.5% adds to the returns for the investors. Omnicom has been a steady performer with decent growth in revenues and net income over the past few years. There has been some slowing down of the pace of growth over the last few quarters, but that may change if the company can focus on the high growth markets and segments of the advertising business. Emerging markets are extremely important for growth of ad companies, and it is good that Omnicom has been able to leverage the faster growth in those markets. Focus on emerging trends, like increased popularity of online advertising, is also important. Native advertising / social media sponsorship is also gaining in importance. IZEA (IZEA) provides a social media platform where advertisers can pay celebrities and other influencers to tweet, pin, blog, youtube, instagram etc. about their products. For Omnicom, there has been a reduction in debt from $4.44 billion to $4.04 billion on a sequential basis. The proposed merger with Publicis (PUB) is a major step for the company. There was news that an investor has sued Omnicom to stop the merger saying that the terms are unfair to Omnicom shareholders.
