Share price as of Tuesday's close:

$24.25

Share price now:

$29.14

Change:

20%

Volume:

10.07 million shares, daily average 2.13 million shares

Last time this high:

June 29, 2001

52-week high:

$47.44

52-week low:

$18.25

Forward P/E before announcement (calendar 2002):

20.9

Forward P/E after announcement (calendar 2002):

25.1

CYNICS MIGHT ARGUE that the Interpublic Group, the world's largest advertising agency, is in the business of spin. Its job, after all, is to bathe things in a positive light. This skill sure came in handy Wednesday

Shares of the enormous ad agency rose 20% after the company's third-quarter earnings presentation inspired upgrades from analysts at Salomon Smith Barney and Morgan Stanley. The company which, thanks to a June merger with True North Communications, operates Foote Cone & Belding, McCann-Erickson, Lowe Group and other notable ad shops offered a decidedly mixed bag of results. It reported quarterly earnings of 15 cents a share, two cents ahead of the Street's expectations. But, like others in the sector, its revenue continued to slump as clients curbed their spending. IPG's overall revenue fell 7.4%, while its "organic revenue" (that is, the revenue from accounts that existed a year ago) fell 8.5%. And the company said it expects revenue to fall again in the fourth quarter.

So what was to like? IPG proved it's cutting costs aggressively to the tune of $300 million in annual savings, thanks to the True North merger. IPG says it's in the position to generate enough cost savings to lock in 15% earnings-per-share growth even with no revenue growth. And Morgan Stanley and Salomon Smith Barney estimate that the moves will help the company hike its earnings by 2% for every 1% increase in revenues in the future.

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"Financial management appears to be improving," wrote Morgan Stanley's Michael Russell. "We like the sober tone that management is taking as it realigns costs during this difficult time for both the company and the industry."