UPDATE 3-WPP raises forecasts after U.S. turnaround

* Q1 like-for-like revenues flat, up 1 pct in March

* Says full-yr forecasts being revised up

* Seen biggest turnaround in U.S.

* Shares up 2 pct on index up 0.2 pct

(Adds reaction, further details)

By Kate Holton

LONDON, April 30 (BestGrowthStock) – WPP (WPP.L: ), the world’s
largest ad firm by sales, raised its key like-for-like full-year
revenue forecast on Friday to 2 percent growth from a previous
prediction of flat after a strong turnaround in the United
States.

Adding to the signs of a global ad recovery following strong
updates from rivals last week, WPP said the key organic sales
figure had been flat in the first quarter, including March which
was up 1 percent, the first monthly revenue growth in 14 months.

Shares in the firm, whose clients include Vodafone, Ford and
Unilever, rose 2 percent at 0950 GMT, ahead of the FTSE 100
(.FTSE: ) which was down 0.2 percent.

WPP said it had seen a change in client attitudes, with the
most marked turnaround in the United States, and Chief Executive
Martin Sorrell told Reuters the forecasts could be conservative.

“This is what our businesses are forecasting, without us
having gone through them and usually when we do go through them
they tend to be on the conservative side,” he said in a phone
interview from Hong Kong.

“To make the point, in the first quarter we were three
percent ahead of where we were budgeting.”

Analysts were expecting an organic sales figure of 0.9
percent, according to a Reuters poll, which had a range of 0 to
2.1 percent.

“Overall, we would expect no significant changes to
full-year numbers today though the limited increase to guidance
and underperformance in Q1 vs. peers may dampen hopes of robust
earnings upgrades,” UBS said in a note to clients.

Analysts had originally expected WPP’s organic sales to be
slightly down for the first quarter, after they fell more than 8
percent in 2009, but they revised their numbers after rivals
Omnicom (OMC.N: ) and Publicis (PUBP.PA: ) posted improved trading.

French rival Publicis beat forecasts for its first-quarter
sales last week, when it reported organic growth of 3.1 percent.
[ID:nLDE63L047]

Omnicom Group (OMC.N: ), which reported first quarter organic
revenue up 2.1 percent, said it had seen a stronger performance
in the United States, Africa and the Middle East.
[ID:nN20256112]

The performance was boosted by the U.S. market, which had
first-quarter growth of 4 percent on a constant currency basis,
while Britain was positive and mainland China and India showed
combined growth of over 5 percent.

“It’s a case of America biting back,” Sorrell told Reuters
Insider TV.

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For the Reuters Insider segment on WPP please click on
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Western Continental Europe was described as the most
challenged region.

Of the different types of business, WPP said public
relations, public affairs and specialist communications such as
direct and digital had recovered, while advertising and media
investment management was still down.

“The group has managed expectations well and therefore flat
growth will be no surprise, despite seeing more positive growth
from peers that have already reported,” Citi analysts said.

“However, the questions will be focused on why digital growth
and growth in the faster growing markets lags peers.”

The group said margins should improve “in line with, if not
better than, the group’s margin target of 1.0 margin pound
improvement”.

Stock Market Today

(Reporting by Kate Holton; Editing by David Cowell and Rupert
Winchester)

UPDATE 3-WPP raises forecasts after U.S. turnaround