JWT Group’s Results Fall 38% in Quarter

JWT Group, an international advertising and public relations group, said net income for the third quarter fell 38% to $2.7 million from $4.4 million in the same period last year.

Don Johnston, chairman and chief executive, said the decline was due to lower earnings from its J. Walter Thompson and Hill & Knowlton units, and a significant increase in the provision for taxes.

He added that this more than offset higher earnings from Lord, Geller, Federico, Einstein Inc., a New York advertising agency, and a $2.6-million pretax gain from curtailment of a domestic pension plan.

Commissions and fees of JWT Group for the recent quarter rose 10% to $149 million from $136 million in the prior year.

In the United States, commissions and fees increased 6%, while in the other regions of the world they rose 17%, significantly aided by a decline in the value of the dollar, the company said.

Third-quarter income from operations was $7.6 million, 20% lower than the $9.6 million reported in the 1985 quarter. For the nine months, income from operations declined 12% to $25.7 million from $29.3 million.

Operating income from J. Walter Thompson Co., the largest U.S.-based advertising agency, declined because commissions and fees in most regions around the world were below what JWT had planned, as its advertising clients spent less than they budgeted, Johnston said. In the short-term, costs remained tied to clients’ original spending plans.