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IPG Reports 9.3 Percent Organic Growth in Q1, Strong PR Showing

Interpublic Group keeps the positive earnings trend going with 9.3 percent organic growth reported in Q1 2011. Revenue totaled $1.47 billion for the quarter, a 10.3 percent increase year-over-year.

According to Harris Diamond, CEO of IPG’s Constituency Management Group, it was a “terrific quarter” for IPG’s PR firms (a sentiment expressed during this morning’s earnings call). The company’s PR agencies include Weber Shandwick, GolinHarris, and Carmichael Lynch. There was year-over-year organic growth of eight percent, with, according to Diamond, “strength in the U.S. and Asia.” He also said things were “turning positive” in Europe.

Overall, IPG reported 8.8 percent organic growth in the U.S. and 10.2 percent internationally.

Diamond attributed the positive earnings outcome for PR to social media, something he says has been going strong for about a year. He said social media was “driving all sectors” from corporate to crisis and behind.

“And it has become additive,” he said. “Every time there’s a new channel created, that all positive for us.”

Diamond went on to highlight consumer, along with tech and healthcare as robust business areas. And to the strength in the U.S., Diamond says clients are optimistic about their top line prospects even if there are still larger economic struggles the country is facing.

“No doubt, especially in consumer, technology, and to a certain extent, healthcare, clients believe they can grow their top line,” he said.

Michael Roth, IPG’s chairman and CEO, expressed optimism about the company as a whole in a statement.

“All of our major agencies contributed to this performance, led by our operations in the U.S. and emerging markets,” he said. “We remain confident that we can deliver on our 2011 targets of 4-5% organic revenue growth and 9.5-10% operating margin, as well as on our long-term commitment to further enhance shareholder value.”

The company also saw improvements in operating losses (from $59.4 million in 2010 to $45.3 million) and a 10.3 percent increase in salaries and other related expenses to $1.08 billion.

*Updated at 11:10 a.m.

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