The probability that WPP Group will hit its profit targets for 2001 has been thrown into doubt by analysts at Credit Suisse First Boston. Falling ad revenues have prompted the all-seeing augurs to warn investors that the marketing group’s operating margin will total 14.8% – ahead of last year’s 14% but below the target of 15%.
“We lowered our margin forecast given the difficulty in paring back expenses as revenues decline rapidly,” said CSFB. “We feel the company's stated goal could prove difficult to realise this year.”
The news prompted the group’s shares to fall 3.6% to 693p. Only a few weeks ago, WPP posted 4% revenue growth for the first five months of 2001, at which time it insisted it was on course for the 15% full-year target.