WPP, one of the world’s biggest advertising groups, delivered its second profit warning of the year after activity in China stuttered and companies in the technology sector reduced spending. Shares in London-listed WPP
WPP,
-1.01%
WPP,
-2.23%
dropped more than 2% to a fresh three-year low after chief executive Mark Read said: “Our top-line performance in Q3 was below our expectations and continued to be impacted by the cautious spending trends we saw in Q2, particularly across technology clients.”
“The rest of world saw continued growth in the quarter but was held back by China where a slower than expected macro recovery impacted our integrated creative agencies,” WPP added in a third quarter trading statement released Thursday, in which it halved its forecast for net revenue growth in 2023 to 0.5% to 1%, down from a previous range of 1.5% to 3%. Analysts noted that the drop in spending by the technology sector chimed with comments about faltering advertising made late Wednesday by WPP’s client Meta Platforms
META,
-4.17%,
and together they pointed to signs of a faltering global economy. WPP’s clients also include Alphabet’s
GOOG,
-9.60%
Google and Microsoft
MSFT,
+3.07%.
“When advertisers are in trouble, it is typically not a good sign for the economy,” said Danni Hewson, head of financial analysis at AJ Bell. “The …
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