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Nielsen (NLSN) Q4 Earnings and Revenues Surpass Estimates

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Nielsen Holdings plc reported fourth-quarter 2020 adjusted net earnings of 53 cents per share, which surpassed the Zacks Consensus Estimate of 46 cents. Also, the bottom line was up 29.3% from the year-ago quarter.

Total revenues came in at $1.67 billion, which declined 1.1% year over year. Also, the figure declined 1.8% on a constant-currency basis.

However, the top line surpassed the Zacks Consensus Estimate of $1.62 billion.

Nielsen Holdings Plc Price, Consensus and EPS Surprise

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 $872 million (accounting for 52% of total revenues) from this segment, reflecting a decline of 1.9% from the year-ago level or 2.6% on a constant-currency basis.

We note that Audience Measurement revenues increased 0.2% year over year to $624 million.

However, Plan/Optimize revenues were $248 million, which decreased 6.8% year over year due to the COVID-19 pandemic.

Nielsen Global Connect: It generated revenues of $800 million (48% of total revenues), reflecting a 0.2% decline from the year-ago period. Also, the figure decreased 0.9% on a constant-currency basis.

Revenues in Measure came in at $548 million, increasing 0.4% year over year. However, Predict/Activate revenues decreased 1.6% from the year-ago quarter to $252 million.

Operating Results

Adjusted EBITDA was $560 million for the fourth quarter, up 13.8% from the prior-year level. Adjusted EBITDA margin expanded 439 basis points to 33.5%. 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 $455 million, decreasing 8.8% from the year-ago figure.

Operating income was $166 million for the quarter, down 25.9% year over year.

Balance Sheet & Cash Flow

As of Dec 31, 2020, cash and cash equivalent balance was $610 million, down from $2.3 billion on Sep 30, 2020.

At fourth quarter-end, gross debt was $8.3 billion compared with $10 billion at the end of the prior quarter. Net debt (gross debt excluding cash and cash equivalents) was $7.7 billion and net debt leverage ratio was 4.09 at the end of the reported quarter.

Cash flow from operations decreased to $337 million from $470 million in the prior-year quarter. Further, capex totaled $174 million and free cash flow decreased from the year-ago level to $225 million for the fourth quarter.

2021 Guidance

The company provided its 2021 guidance on a constant-currency basis.

Revenues are expected to increase in the range of 2-3%. Organic revenue growth is expected to increase in the range of 3.5-4.5%.

Adjusted EBITDA is anticipated in the range of $1.460-$1.480 billion. Meanwhile, adjusted EBITDA margin is expected within 42.25-42.5%.

Additionally, Nielsen expects free cash flow in the range of $580-$630 million. Further, adjusted earnings are expected between $1.43 and $1.54 per share.

Zacks Rank & Key Picks

Nielsen currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Semtech Corporation (SMTC - Free Report) , KLA Corporation (KLAC - Free Report) and Facebook , 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 Semtech, KLA Corp., and Facebook is currently projected at 12.5%, 11.6%, and 19.2%, respectively.

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