Nielsen Holdings plc reported first-quarter 2019 adjusted net earnings of 35 cents per share, beating the Zacks Consensus Estimate of 31 cents. However, the figure was down 12.5% from the year-ago quarter.
Moreover, total revenues came in at $1.563 billion, decreasing 2.9% year over year. However, the reported revenues increased 0.4% on a constant-currency basis and marginally surpassed the Zacks Consensus Estimate of $1.561 billion.
Operating Results
Global Media revenues during the first quarter were $826 million (accounting for 53% of its total revenues), reflecting an increase of 0.2% from the year-ago level or 1.3% on a constant-currency basis. Also, Audience Measurement revenues increased 1.5% from the prior-year quarter, driven by continued client adoption of Total Audience Measurement system, partly offset by pressure in local television measurement. However, Plan/Optimize revenues decreased 3.1% year over year or 0.9% on a constant-currency basis. Excluding the impact of acquisitions and one-time items, Plan/Optimize revenues were flat on a constant-currency basis.
Global Connect revenues during the quarter were $737 million (47% of the total revenues), reflecting a decrease of 6.2% from the year-ago period or 0.7% on a constant-currency basis. Revenues in Measure decreased 4.3% year over year. Excluding foreign currency impact, revenues increased 1.7%, reflecting strong retail measurement services and improved trends in the United States. However, Predict/Activate revenues decreased 11.2% from the year-ago quarter or 6.6% on a constant-currency basis. The decrease was due to continued softness in areas such as custom analytics.
Gross margin was 55.5%, down 20 basis points (bps) from the year-ago period.
Nielsen’s operating expenses, namely selling, general and administrative, were $480 million, decreasing 2.6% from the year-ago figure.
Adjusted EBITDA was $415 million in the first quarter, decreasing 1.9% from the prior-year level. However, adjusted EBITDA margin expanded 28 bps to 26.6% as productivity initiatives were offset by product mix and investments in growth initiatives.
Balance Sheet & Cash Flow
Nielsen exited the quarter with a cash balance of approximately $530 million compared with $524 million in the last reported quarter.
Net debt (gross debt excluding cash and cash equivalents) was $8.23 billion, and net debt leverage ratio was 4.47 at the end of the quarter.
Cash flow from operations was ($43) million, capex totaled $122 million and free cash flow amounted to ($165) million in the first quarter.
Guidance
Management reiterated its guidance for full-year 2019. It expects total revenues to be approximately $6.4 billion on a constant-currency basis.Adjusted earnings per share are expected to remain in the range of $1.63-$1.77.
The company also expects free cash flow in the range of $525-$575 million.
Zacks Rank and Stocks to Consider
Currently, Nielsen carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the broader technology sector include Facebook, Inc. , Shopify Inc. (SHOP - Free Report) and Square (SQ - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Facebook, Shopify and Square is currently projected at 18.2%, 23.7% and 25%, respectively.
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Nielsen Holdings plc reported first-quarter 2019 adjusted net earnings of 35 cents per share, beating the Zacks Consensus Estimate of 31 cents. However, the figure was down 12.5% from the year-ago quarter.
Moreover, total revenues came in at $1.563 billion, decreasing 2.9% year over year. However, the reported revenues increased 0.4% on a constant-currency basis and marginally surpassed the Zacks Consensus Estimate of $1.561 billion.
Operating Results
Global Media revenues during the first quarter were $826 million (accounting for 53% of its total revenues), reflecting an increase of 0.2% from the year-ago level or 1.3% on a constant-currency basis. Also, Audience Measurement revenues increased 1.5% from the prior-year quarter, driven by continued client adoption of Total Audience Measurement system, partly offset by pressure in local television measurement. However, Plan/Optimize revenues decreased 3.1% year over year or 0.9% on a constant-currency basis. Excluding the impact of acquisitions and one-time items, Plan/Optimize revenues were flat on a constant-currency basis.
Global Connect revenues during the quarter were $737 million (47% of the total revenues), reflecting a decrease of 6.2% from the year-ago period or 0.7% on a constant-currency basis. Revenues in Measure decreased 4.3% year over year. Excluding foreign currency impact, revenues increased 1.7%, reflecting strong retail measurement services and improved trends in the United States. However, Predict/Activate revenues decreased 11.2% from the year-ago quarter or 6.6% on a constant-currency basis. The decrease was due to continued softness in areas such as custom analytics.
Gross margin was 55.5%, down 20 basis points (bps) from the year-ago period.
Nielsen’s operating expenses, namely selling, general and administrative, were $480 million, decreasing 2.6% from the year-ago figure.
Adjusted EBITDA was $415 million in the first quarter, decreasing 1.9% from the prior-year level. However, adjusted EBITDA margin expanded 28 bps to 26.6% as productivity initiatives were offset by product mix and investments in growth initiatives.
Balance Sheet & Cash Flow
Nielsen exited the quarter with a cash balance of approximately $530 million compared with $524 million in the last reported quarter.
Net debt (gross debt excluding cash and cash equivalents) was $8.23 billion, and net debt leverage ratio was 4.47 at the end of the quarter.
Cash flow from operations was ($43) million, capex totaled $122 million and free cash flow amounted to ($165) million in the first quarter.
Guidance
Management reiterated its guidance for full-year 2019. It expects total revenues to be approximately $6.4 billion on a constant-currency basis.Adjusted earnings per share are expected to remain in the range of $1.63-$1.77.
The company also expects free cash flow in the range of $525-$575 million.
Zacks Rank and Stocks to Consider
Currently, Nielsen carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the broader technology sector include Facebook, Inc. , Shopify Inc. (SHOP - Free Report) and Square (SQ - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Facebook, Shopify and Square is currently projected at 18.2%, 23.7% and 25%, respectively.
Is Your Investment Advisor Fumbling Your Financial Future?
See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.”
Click to get it free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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