Although the agency world is abuzz about The Walt Disney Co. media review in which Omnicom Group Inc.emerged as one of the big winners, executives at the holding company devoted very little time to the matter on its third-quarter earnings call.
Disney has concluded a review of its global media business, estimated to be a $2.2 billion account. Omnicom retained the planning and buying assignments for Disney Studios, including the Pixar, Marvel, Lucasfilm, Walt Disney Pictures and Walt Disney Animation imprints, as well as the Twentieth Century Fox, Fox Searchlight Pictures and Twentieth Century Fox Home Entertainment brands.
Reports indicate that Omnicom also added ABC (US), Disney Channel (US) and Freeform (US) and the former 21st Century Fox Inc. cable assets of FX (US) and National Geographic Channel (US). For its part, Publicis Groupe SA reportedly won global planning and buying for Disney theme parks, the soon-to-launch Disney+ streaming service, as well as all media business in the Europe, Asia-Pacific and Latin American regions.
Omnicom CEO John Wren on an Oct. 15 call with analysts called the Disney win "very important."
"We were able to defend our business very well," he said. "We're very pleased with our relationship there and look forward to it growing as we go forward."
CFO Philip Angelastro did not provide a specific timetable for when the new business would yield incremental revenues.
Third-quarter worldwide revenue slipped 2.4% to $3.62 billion during the period ended Sept. 30, from $3.71 billion in the year-earlier period, as a 2.2% increase in organic revenue growth was countered by a 1.5% negative impact of foreign exchange rates, and a decrease in acquisition revenue of 3.1%.
In the U.S., organic revenues improved 2.7% to $1.99 billion, or 55% of overall company revenue. Angelastro said the stateside amelioration was led by the company’s advertising and media agencies, as well as its healthcare and precision marketing agency.
Organic revenue from Europe, the second-largest geographical contributor for Omnicom at 16.6%, rose 1.6% to $602.5 million. Asia-Pacific, the company's third-largest region with 11.6% of total revenues, registered organic growth of 0.4% to $418.9 million.
The U.K., which accounted for 9.6% of revenue, grew 3.0% to $346.1 million. Angelastro said Omnicom's businesses have experienced no impact from Brexit.
Latin America was up 6.6% to $100.2 million, accounting for 2.8% of total revenues. Other North America, mostly Canada, grew 2.7% organically to $103.0 million.
The only Omnicom region to slide was the Middle East and Africa, the company’s smallest region with 1.6% of revenues, which saw organic revenues fall 4.5% to $59.6 million.
Net income attributable to Omnicom dipped 2.9% to $290.2 million, or $1.32 per share, from $298.9 million, or $1.32 per share in the third quarter of 2018, which benefited from a net after-tax gain of $18.2 million from the disposition of certain subsidiaries, less charges in connection with repositioning actions and increase to income tax related to the Tax Cuts and Jobs Act of 2017.
The S&P Global Market Intelligence consensus EPS estimate for the period was $1.30 on a normalized basis and $1.32 on a GAAP measure.