We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Nielsen (NLSN) Q3 Earnings and Revenues Surpass Estimates
Read MoreHide Full Article
Nielsen Holdings plc reported third-quarter 2020 adjusted net earnings of 43 cents per share, which surpassed the Zacks Consensus Estimate by a penny. However, the bottom line was down 15.7% from the year-ago quarter.
Total revenues came in at $1.56 billion, which declined 3.3% year over year. Also, the figure declined 3% on a constant-currency basis.
However, the top line surpassed the Zacks Consensus Estimate of $1.52 billion.
The company has agreed to sell Nielsen Global Connect business to Advent International for a total amount of $2.7 billion. The proceeds from the deal will be used for debt reduction and general corporate purposes.
Nielsen Holdings Plc Price, Consensus and EPS Surprise
Nielsen Global Media: The company generated revenues of $836 million (accounting for 53% of total revenues) from this segment, reflecting a decline of 3.9% from the year-ago level or 4.2% on a constant-currency basis.
We note that Audience Measurement revenues decreased 1.3% year over year to $613 million, reflecting the impact of the COVID-19 pandemic on sports and non-contracted revenues.
Further, Plan/Optimize revenues were $223 million, which decreased 10.4% year over year due to the COVID-19 pandemic.
Nielsen Global Connect: The company generated revenues of $727 million (47% of total revenues), reflecting a 2.5% decline from the year-ago period. Also, the figure decreased 1.6% on a constant-currency basis.
Revenues in Measure came in at $520 million, decreasing 1.9% year over year. Further, Predict/Activate revenues decreased 4.2% from the year-ago quarter to $207 million.
Operating Results
Adjusted EBITDA was $501 million for the third quarter, up 5.3% from the prior-year level. Adjusted EBITDA margin expanded 259 basis points to 32.1%. The increase reflected the measures taken during the quarter and benefits of permanent cost actions from the optimization plan.
Nielsen’s selling, general and administrative expenses were $451 million, decreasing 3.4% from the year-ago figure.
Operating income was $174 million for the quarter. In the year-ago quarter, operating income was ($740) million.
Balance Sheet & Cash Flow
As of Sep 30, 2020, cash and cash equivalent balance was $2.3 billion, up from $438 million on Jun 30, 2020. The cash and cash equivalents balance includes the proceeds from the senior notes due 2028 and 2030.
At third quarter-end, gross debt was $10 billion compared with $8.42 billion at the end of the prior quarter. Net debt (gross debt excluding cash and cash equivalents) was $7.8 billion and net debt leverage ratio was 4.28 at the end of the reported quarter.
Cash flow from operations increased to $417 million from $250 million in the second quarter. Further, capex totaled $113 million and free cash flow increased to $304 million for the third quarter.
2020 Guidance
The company maintained its 2020 revenue guidance. However, it has changed 2020 adjusted EBITDA, EBTDA margin, earnings per share and free cash flow expectations on a constant-currency basis.
Revenues are expected to decline in the range of 2-4%, same as the previous expectation.
Adjusted EBITDA is anticipated in the range of $1.850-$1.880 billion versus $1.800-$1.860 billion projected earlier. Adjusted EBTDA margin is expected between 29.5% and 30% versus earlier expectation of 29-30%.
Additionally, Nielsen expects free cash flow in the range of $530-$550 million versus prior projection of $480-$530 million.
Further, adjusted earnings are expected between $1.54 and $1.62 per share versus prior expectation of $1.50-$1.62.
Long-term earnings growth for ON Semiconductor, Overstock.com, and Revolve Group is currently projected at 1.3%, 20% and 17.3%, respectively.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Image: Bigstock
Nielsen (NLSN) Q3 Earnings and Revenues Surpass Estimates
Nielsen Holdings plc reported third-quarter 2020 adjusted net earnings of 43 cents per share, which surpassed the Zacks Consensus Estimate by a penny. However, the bottom line was down 15.7% from the year-ago quarter.
Total revenues came in at $1.56 billion, which declined 3.3% year over year. Also, the figure declined 3% on a constant-currency basis.
However, the top line surpassed the Zacks Consensus Estimate of $1.52 billion.
The company has agreed to sell Nielsen Global Connect business to Advent International for a total amount of $2.7 billion. The proceeds from the deal will be used for debt reduction and general corporate purposes.
Nielsen Holdings Plc Price, Consensus and EPS Surprise
Nielsen Holdings Plc price-consensus-eps-surprise-chart | Nielsen Holdings Plc Quote
Segments Details
Nielsen Global Media: The company generated revenues of $836 million (accounting for 53% of total revenues) from this segment, reflecting a decline of 3.9% from the year-ago level or 4.2% on a constant-currency basis.
We note that Audience Measurement revenues decreased 1.3% year over year to $613 million, reflecting the impact of the COVID-19 pandemic on sports and non-contracted revenues.
Further, Plan/Optimize revenues were $223 million, which decreased 10.4% year over year due to the COVID-19 pandemic.
Nielsen Global Connect: The company generated revenues of $727 million (47% of total revenues), reflecting a 2.5% decline from the year-ago period. Also, the figure decreased 1.6% on a constant-currency basis.
Revenues in Measure came in at $520 million, decreasing 1.9% year over year. Further, Predict/Activate revenues decreased 4.2% from the year-ago quarter to $207 million.
Operating Results
Adjusted EBITDA was $501 million for the third quarter, up 5.3% from the prior-year level. Adjusted EBITDA margin expanded 259 basis points to 32.1%. The increase reflected the measures taken during the quarter and benefits of permanent cost actions from the optimization plan.
Nielsen’s selling, general and administrative expenses were $451 million, decreasing 3.4% from the year-ago figure.
Operating income was $174 million for the quarter. In the year-ago quarter, operating income was ($740) million.
Balance Sheet & Cash Flow
As of Sep 30, 2020, cash and cash equivalent balance was $2.3 billion, up from $438 million on Jun 30, 2020. The cash and cash equivalents balance includes the proceeds from the senior notes due 2028 and 2030.
At third quarter-end, gross debt was $10 billion compared with $8.42 billion at the end of the prior quarter. Net debt (gross debt excluding cash and cash equivalents) was $7.8 billion and net debt leverage ratio was 4.28 at the end of the reported quarter.
Cash flow from operations increased to $417 million from $250 million in the second quarter. Further, capex totaled $113 million and free cash flow increased to $304 million for the third quarter.
2020 Guidance
The company maintained its 2020 revenue guidance. However, it has changed 2020 adjusted EBITDA, EBTDA margin, earnings per share and free cash flow expectations on a constant-currency basis.
Revenues are expected to decline in the range of 2-4%, same as the previous expectation.
Adjusted EBITDA is anticipated in the range of $1.850-$1.880 billion versus $1.800-$1.860 billion projected earlier. Adjusted EBTDA margin is expected between 29.5% and 30% versus earlier expectation of 29-30%.
Additionally, Nielsen expects free cash flow in the range of $530-$550 million versus prior projection of $480-$530 million.
Further, adjusted earnings are expected between $1.54 and $1.62 per share versus prior expectation of $1.50-$1.62.
Zacks Rank & Key Picks
Nielsen currently has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the broader technology sector include ON Semiconductor Corporation (ON - Free Report) , Overstock.com, Inc. and Revolve Group, Inc. (RVLV - 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 ON Semiconductor, Overstock.com, and Revolve Group is currently projected at 1.3%, 20% and 17.3%, respectively.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>