Interpublic Group, the third-largest advertising agency, and True North Communications Inc., a rival it's buying, expect second-quarter profit to miss forecasts because of slower advertising sales growth.
Interpublic said it now expects profit of 30 cents to 35 cents a share, compared with its previous estimate of 40 cents to 45 cents. Analysts on average were expecting 42 cents, according to First Call/Thomson Financial.
Chicago-based True North said it expects to earn 37 cents to 42 cents a share, less than the 49-cent average estimate of five analysts polled by First Call.
The companies said they expect to complete their $2-billion merger by the end of the month and said they expect to make job cuts to reduce expenses. True North, which has about 12,000 employees, said it already has fired 500 people this year. Interpublic has about 50,000 employees.
Shares of New York-based Interpublic fell $1 to close at $36, while True North fell $1.18 to $40.82, both on the New York Stock Exchange.