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Nielsen (NLSN) to Report Q2 Earnings: Will it Surprise?

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Nielsen Holdings plc (NLSN - Free Report) is set to report second-quarter 2017 results on Jul 27. Last quarter, the company delivered a negative earnings surprise of 34.88%.

Notably, Nielsen surpassed the Zacks Consensus Estimate only once in the last four quarters, with an average negative surprise of 19.47%.

The company’s stock has lost 6.03% year to date compared with the industry’s growth of 20.93%.

Let’s see how things are shaping up for this announcement.

Factors at Play

Nielsen is an information and measurement company offering media and marketing information on what consumers watch and buy on a global and local basis.

The company reported weak first-quarter results, with both the top and the bottom lines missing the Zacks Consensus Estimate. However, revenues increased year over year driven by continued strength in the company’s Watch segment and in emerging markets, partially offset by weakness in the Buy segment.

Moreover, Nielsen is partnering with big companies to extend its TV ratings service beyond the Nielsen Local TV Ratings Service. Recently, Nilesen signed a multi-year agreement with Tennis Channel, providing its National TV Ratings service to the latter.  Earlier, it also renewed its agreement with CBS Corporation’s CBS Radio to deliver its local market insights and currency ratings to the broadcast media operator across all the Portable People Meter (PPM) metros.

These partnership and agreements will help Nielsen to expand its client base and boost its Watch segment revenues in the upcoming quarter.

Also, regular dividend payment and share-repurchase programs reflect Nielsen’s financial strength and commitment to return value to shareholders. The company's new products are doing well and should drive revenues in the to-be-reported quarter.

However, continued investments in technology and infrastructure could weigh on margins and profitability in the to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively show that Nielsen is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 63 cents. Therefore, Earnings ESP for Nielsen is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Nielsen carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Nielsen N.V. Price and EPS Surprise


Nielsen N.V. Price and EPS Surprise | Nielsen N.V. Quote

Stocks to Consider

Here are a few better-ranked stocks which you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter.

Cypress Semiconductor Corporation (CY - Free Report) , with an Earnings ESP of +11.11% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lam Research Corporation (LRCX - Free Report) , with an Earnings ESP of +1.33% and a Zacks Rank #1.

Fortive Corporation (FTV - Free Report) , with an Earnings ESP of +2.90% and a Zacks Rank #2.

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