It has been about a month since the last earnings report for Nielsen Holdings Plc . Shares have added about 12.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nielsen Holdings Plc due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Nielsen Q4 Earnings and Revenues Surpass Estimates
Nielsen Holdings 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Nielsen Holdings Plc has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Nielsen Holdings Plc has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Nielsen Holdings Plc (NLSN) Up 12.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Nielsen Holdings Plc . Shares have added about 12.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nielsen Holdings Plc due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Nielsen Q4 Earnings and Revenues Surpass Estimates
Nielsen Holdings 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Nielsen Holdings Plc has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Nielsen Holdings Plc has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.