WPP sees ad slump past worst

WPP, which has the likes of Unilever, Vodafone, HSBC and Ford as clients, reported 2009 organic revenues down 8.1 percent Friday, at the lower end of a range of forecasts, but showed signs its operating margins were improving after it cut jobs.

Chief Executive Martin Sorrell told Reuters the group had recovered in 2009 after initially being slow to cut head count. He said he now expected 2010 like-for-like revenues to be flat, with margins up to 12.7 percent from 11.7 percent in 2009.

It expects a slightly stronger second half.

Analysts said the like-for-like revenue figure, a closely watched industry metric which strips out foreign currency impact and recent acquisitions, was slightly light but said the firm had done well to manage its operating margins in such tough conditions.

Its margin for the year was 11.7 percent and 15.4 percent in the second half.

UBS analysts said they did not expect the figures to result in any meaningful underlying upgrades.

"Given recent share price moves and high investor expectations for an improving outlook, guidance only in line could disappoint," they said.

Shares in the group were down 1.28 percent in early morning trading.

WPP reported 2009 like-for-like revenues down 8.1 percent and down 7 percent in the fourth quarter, compared to a Reuters poll forecasting a 2009 drop of 7.7 percent and down 6.3 percent in the fourth quarter.