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Nielsen's (NLSN) Q4 Earnings Miss Estimates, Revenues Beat

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Nielsen Holdings plc reported adjusted fourth-quarter 2018 net earnings of 51 cents per share, missing the Zacks Consensus Estimate of 54 cents. However, the figure was up 10.9% from the year-ago quarter.

Total revenues came in at $1.658 billion, decreasing 5.8% year over year. Also, the reported revenues decreased 3.5% on a constant-currency basis. However, the top line surpassed the Zacks Consensus Estimate of $1.64 billion.

Starting from the fourth quarter of 2018, the company has reorganized into two new segments, namely Nielsen Global Media and Nielsen Global Connect.

Global Media revenues during the fourth quarter were $869 million (52% of its total revenues), reflecting a decrease of 3.6% from the year-ago level or 2.9% on a constant-currency basis.

Global Connect revenues during the quarter were $789 million (48% of the total revenues), reflecting a decrease of 8.3% from the year-ago period or 4.2% on a constant-currency basis.

Operating Results

Watch business revenues were $881million (accounting for 53% of total fourth-quarter revenues), reflecting a decrease of 3.5% year over year or 2.8% on a constant-currency basis. Nevertheless, Audience Measurement of Video and Text revenues increased 0.8% from the prior-year quarter, driven by ongoing investments and continued client adoption. However, Marketing Effectiveness revenues decreased 23% year over year.

Buy business revenues were $777 million (47% of the total revenues), reflecting a decrease of 8.4% from the year-ago quarter or 4.4% on a constant-currency basis. Excluding foreign currency impact, revenues from the Developed market declined 7.1% on a constant-currency basis. Revenues from emerging markets were down 4.9% but increased 4% on a constant-currency basis, driven by continued demand for the company’s services to local clients, partially offset by continued pressure from multinationals.

Gross margin was 57.4%, down 90 basis points (bps) from the year-ago period.

Nielsen’s operating expenses, namely selling, general and administrative expenses,were $507 million, increasing 6.1% from the year-ago figure.

Adjusted EBITDA was $488 million in the fourth quarter, decreasing 15.3% from the prior-year level. Also, Adjusted EBITDA margin contracted 328 bps to 29.4% due to softer revenues, along with continued investments in Buy and Watch segments, partly offset by productivity initiatives.

Balance Sheet & Cash Flow

Nielsen exited the quarter with a cash balance of approximately $524 million compared with $446 million in the last reported quarter.

Net debt (gross debt excluding cash and cash equivalents) was $7.86 billion, and net debt leverage ratio was 4.25 at the end of 2018.

Cash flow from operations was $546 million, capex totaled $149 million and free cash flow amounted to $397 million in the fourth quarter.


Management issued 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 per share.

The company expects free cash flow in the range of $525-$575 million.

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