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True North in 2Q warning
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June 14, 2001: 5:58 p.m. ET
Ad firm warns that 2Q income could drop; Interpublic merger on track
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NEW YORK (CNNfn) - Advertising firm True North Communications Inc., which is merging with Interpublic Group of Cos., warned Thursday that second-quarter income could drop by as much as 12 cents.
Before merger related charges and other unusual items, True North now expects to report second-quarter net income of 37 cents-to-42 cents a share.
Earnings tracker First Call had expected 49 cents a share.
Chicago-based True North (TNO: down $1.18 to $40.82, Research, Estimates) cited a softer global economic environment, lower-than-anticipated spending by clients, and a slower industry pace for new business. The ad firm will look for opportunities to cut costs, including more staff reductions and general expense cuts, the company said in a statement.
Interpublic (IPG: down $1.00 to $36.00, Research, Estimates), the corporate parent to the big New York agencies McCann-Erickson WorldGroup and Lowe Group, agreed in March to buy True North in a $2.1 billion purchase.
The acquisition is expected to close by the end of the month, subject to regulatory and shareholder approval. A special meeting where shareholders will vote on the merger is slated for June 19.
Similarly buffeted by slowing ad sales, newspaper publishers E.W. Scripps and the Tribune Co. also warned of second-quarter earnings shortfalls late Thursday. 
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