Advertiser WPP cuts revenue forecast again

Global advertising giant WPP on Thursday slashed its revenue forecast for the second time in three months, and warned of a slowdown in Europe and the United States. The company said in a statement that it expected like-for-like revenue growth, which strips out the impact of exchange rate fluctuations and acquisitions -- of between 2.5 percent and 3.0 percent in 2012. WPP, which owns the Young & Rubicam and Ogilvy advertising agencies among others, had already lowered its revenue projections in August, saying then it expected growth of close to 3.5 percent, down from 4.0 percent previously. The group blamed uncertainty arising from the ongoing sovereign debt crisis in the eurozone, and a poor start to the third-quarter US earnings season. "Clients seem to be increasingly cautious and this has impacted most geographies and functions," the advertising firm said. "Concerns remain about the political will to implement the necessary European fiscal integration and the authorities seem to have been surprised by the September general weakness and a disappointing start to the third-quarter earnings reporting season." Markets were also unsettled by "heightened political concerns in the Middle East, exacerbated by the continuing deterioration in Syria," while there were lingering fears over the health of the Chinese economy. WPP added that the biggest uncertainty was "the health of the American economy and its fiscal cliff, deficit and indebtedness." Despite the bleak outlook, the London-listed company said its revenues rose 1.6 percent to £2.49 billion ($4.03 billion, 3.09 billion euros) in the third quarter, compared with the same part of last year. WPP, which also owns communications agency RLM Finsbury and market research firm Kantar Worldpanel, saw its shares drop 2.54 percent to 787.50 pence in late morning deals on the London stock market, which rose 0.43 percent. "The US corporate third quarter reporting season has so far been disappointing in terms of numbers and outlook," said Hargreaves Lansdown analyst Richard Hunter. "WPP has, unfortunately and perhaps unsurprisingly, been drawn into this disappointment."