WPP, the world's second-largest advertising and marketing services firm, posted third-quarter underlying revenue growth of almost 5 percent on Friday, near the lower end of forecasts and knocking its shares.
Analysts had expected growth of 5.5 percent, according to the average in a Reuters poll of 10 brokers, from a range of 4.5 to 6 percent after the company flagged strong growth in July.
But WPP said it had still increased its market share and had not yet seen much if any impact from the liquidity crisis.
Its shares opened down 4 percent at 666 pence before recovering slightly to 673.5 pence by 0705 GMT.
WPP Chief Executive Martin Sorrell told Reuters the like-for-like growth, a key industry metric which strips out the impact of acquisitions and currency fluctuations, was still ahead of the sector and he was comfortable with that.
"Industry forecasts are predicting that advertising and marketing services will grow at 4-5 percent this year, which for the first nine months, the group has exceeded," the company said in a statement.
Like-for-like revenues were up 5.1 percent and gross margin was up 5.4 percent for the nine month period, said WPP, ranked behind Omnicom Group in size.
Third-quarter reported revenues rose 4.9 percent to 1.48 billion pounds ($3.03 billion) but revenues in constant currencies were up 8.1 percent, with the strength of the pound against the U.S. dollar the main factor in reducing the group's revenue growth.
WPP said despite concerns about the impact of the recent liquidity crisis on levels of client spending, there had been "little or any effect on spending levels across the board, both functionally and geographically."
"Any possible impact is unlikely to be reflected anyway, until the group's budgets for 2008 are finalised, at the beginning of next year," the company said. "In any event, we continue to believe that 2008 will be a good year for the industry, better than 2007."
Sorrell warned, however, that 2009 could be different, when a new administration in the United States sees the books and could be "be tempted to dispense any politically unpleasant medicine to the electorate."
"Whilst the new rapidly-growing parts of the world are no longer as dependent on the US for growth, as they used to be, it is still true that when the US sneezes the rest of the world catches a cold," it said.
Analysts generally noted that underlying growth had come in slightly below expectations but welcomed the continued positive comments on 2008.
WPP said the UK had seen constant currency growth of 5 percent compared to 3.7 percent in the first half, while Asia Pacific, Latin America, Africa and the Middle East also strengthened. North American revenues were up 8 percent, compared to a first half of 8.3 percent.
It secured net new business billings of 703 million pounds in the third quarter from clients such as Citigroup , the International Olympic Committee and Nokia .
WPP, whose agencies include JWT and Young & Rubicam, said the result was in line with the full-year target for operating margin of 15 percent in 2007.