WPP Group Plc, the world's second-biggest advertising company, may say first-half profit rose 12 percent, helped by accelerating sales in China, Bloomberg News reported.
WPP, whose clients include Ford Motor Co and Unilever NV, may say earnings climbed to 197.5 million pounds (US$393 million) from 176.7 million pounds, the median estimate of eight analysts in a Bloomberg News survey by telephone and e-mail. The estimate excludes any impairment or writedowns.
The company may post its sixth straight profit increase of greater than 10 percent, helped by the purchase of at least nine firms in the past year in China and India. London-based WPP, owner of Ogilvy & Mather Worldwide and the Hill & Knowlton public relations firm, said sales in China may climb 20 percent this year, making it the company's third-biggest market earlier than it forecast.
"China is a very important part for WPP in the longer run," Stuart Fraser, who helps manage US$46 billion at Brewin Dolphin in London, said in an interview. "China has expanded tremendously; it's got now a very big, growing middle class who are becoming increasingly brand conscious. This is going to be a good growth area for the company." The firm owns WPP stock.
WPP shares have gained 1.4 percent this year, giving the company a market value of 8.51 billion pounds. The Dow Jones Stoxx 600 Media Supersector Index of 35 stocks has slipped 0.2 percent and the UK's benchmark FTSE 100 Index is down 1.8 percent so far this year.
Revenue may have advanced 1.4 percent to 2.9 billion pounds from 2.86 billion pounds, a survey of 15 analysts showed. WPP may say revenue rose 5.2 percent excluding the effects of acquisitions and currency swings, in line with the first five months of the year, the survey showed.
Ad companies are expanding in emerging markets and in online advertising as growth slows in the United States and in print. Ad sales growth industrywide in North America will decelerate to three percent in 2007 from five percent in 2006, according to GroupM, a unit of WPP.
Growth in western Europe is estimated to be unchanged at four percent. Overall, global ad revenue may rise six percent this year to US$433.2 billion, according to GroupM.