Shares in WPP (LON:WPP) have tumbled in today’s session, as the company trimmed its full-year outlook to reflect the slowdown seen in the third quarter. The development marks a blow for the ad giant’s new chief executive Mark Read who took the helm at the company after its chief executive and founder Sir Martin Sorrell left the group this year.
As of 10:27 BST, WPP’s share price had given up 17.27 percent to 873.60p. Reuters reported earlier in its coverage of the news that the share fall had wiped £2.8 billion off the ad giant’s market capitalisation, taking the stock to a six-year low.
WPP updated on performance
WPP announced in a statement this morning that its third-quarter reported revenue had fallen 0.8 percent to £3.76 billion, impacted by currency headwinds of two percent, while its nine-month reported revenue had dipped 1.6 percent to £11.25 billion.
The ad giant said that it was taking ‘a more cautious outlook’ for the rest of the year to reflect the third-quarter slowdown.
“The slowdown primarily reflects a further weakening of the performance of our businesses in North America and in our creative agencies,” WPP’s chief executive Mark Read commented in the statement, adding that the company was considering selling its stake in data analytics company Kantar.
“The Board has approved a formal process to review the strategic options that will maximise share owner value,” the CEO continued.
Analysts weigh in on news
The BBC quoted George Salmon, equity analyst at Hargreaves Lansdown, as commenting that it looked “like the over-riding theme of [Mark Read’s] restructure will be a simplification of the business”.
“Taking over at a group where success depends so much on having an in-depth knowledge of all the various agencies and divisions was always going to be a serious challenge,” he pointed out. “This journey has already started, and the decision to sell a stake in Kantar is the next step.”