WPP expecting weaker first-half figures

Expectations are low ahead of next Tuesday’s first-half figures.

CEO Martin Sorrell
Source: Bloomberg

The global media and communications firm WPP is expected to post adjusted earnings per share of 29p. This is considerably lower than the previous six month’s £0.542 figure. In part, this is down to sales dropping from £5.693 billion to £5.289 billion. This has seen the market halve its expected pre-tax profit for the company, from just over £1 billion down to £505 million.

Under normal circumstances, global sporting events such as the FIFA World Cup would ensure that business is brisk for companies like WPP - its global viewing figures for the final match were up to 1 billion, with over 34 million people watching the final in Germany alone. The biggest problem WPP has had to tackle is the continuing trend of advertising away from the historical formats and into mobile media. Consumers are spending less time in front of TVs, and more time downloading programmes onto tablets or smartphones. This shift in demographics for the targeted consumer has seen a change in drive from advertisers, as they seek to improve the focus of those viewing their adverts.

Shares in WPP have spent most of the last six months drifting lower and the recent fall below the £12 level, although short-lived, was a worrying break in support. At present the shares continue to trade below the 50-,100- and 200-day moving averages. With data unlikely to impress, it is difficult to see how this momentum can be changed.

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