LONDON (ShareCast) - (Sharecast News) - Publicis shocked investors on Thursday with a surprise fall in second-quarter sales, prompting shares in the French media group to lose as much as 9% in morning trading.
Publicis said that first half organic revenues were €2.2bn following a 2.1% decline in the second-quarter. That reversed a 1.6% improvement in the first three months of the year, and was well below analyst expectations for a rise of around 1.1%. First-half revenues overall were off 0.4%.

The group attributed the weakened performance to the European Union's new data regime as well as an unexpected "operational bump" in its American division, Publicis Health Solutions. Publicis said the future of the arm was now under strategic review.

It also reiterated that guidance for the full-year remained unchanged and pointed to improvements in operating margin, to 14.3%, during the half.

But traders on both side of the Channel remain concerned about the global sector's prospects. Clients are cutting budgets as they move away from traditional marketing methods, while new competitors such as Google and Facebook are shaking up the industry. On Tuesday, US rival Omnicom also missed second-quarter revenue targets.

WPP's shares fell heavily on the Publicis results, making it one of the morning's worst performers on the FTSE 100. By 10.57GMT the shares were down 4% at 1,128p.

Mike van Dulken, head of research at Accendo Markets, said that with WPP only recently losing founder Sir Martin Sorrell, shareholders were "understandably digesting this week's sector news badly, wondering about their own prospects amid a changing advertising landscape and what might lurk in their own first-half results on 4 September".

Chris Beauchamp, chief market analyst at IG, said: "These big ad firms increasingly look like creatures from another age, having had the ground cut from underneath them by Facebook and Google. At the beginning of 2017, WPP had outpaced the FTSE 100 by a huge margin, but things look very different now."

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