Investors Show Unhappiness With Nielsen Q1 Results


Investors reacted negatively to Nielsen‘s Q1 results today (4/25), sending shares tumbling 3.9%, to $39.98, on four times its average volume.

The dip comes as Nielsen’s net income attributable to shareholders slid to $71 million (20 cents per diluted share) from $100 million (27 cents), despite a first-quarter revenue increase of 2.6%, to $1.53 billion.

On a constant-currency basis, Nielsen considers that a 3.2% gain, as Nielsen CEO Mitch Barns said his company’s Q1 results “highlight the importance of our balanced portfolio.”

Why the net income dip? Nielsen explains this is primarily due to higher restructuring charges associated with its continued productivity initiatives, and a higher effective income tax rate “due to the benefit of certain discrete items in the first quarter of 2016 that did not recur during the first quarter of 2017.”

Of particular importance to shareholders is continued strength in Nielsen’s Watch segment and in emerging markets … and a decline in the U.S. for its Buy segment.

“In our Watch segment, progress with our Total Audience Measurement system continued with the addition of out-of-home measurement and the commercial release of Total Content Ratings,” Barns said. “In our Buy segment, despite the weak growth environment in the U.S., our productivity initiatives enable us to continue to invest in our measurement coverage and our Connected System, both of which are important to future growth. In addition, we are pleased to announce a 10% increase in our quarterly dividend as we continue to deliver on our ongoing commitment to enhance shareholder value over the long-term.”

Q1 revenue within the Watch segment increased 10.8%, or 11.1% on a constant currency basis, to $769 million. Excluding the acquisition of Gracenote, Watch revenues increased 5.9%, or 6.2% on a constant currency basis. Audience Measurement of Video and Text revenues increased 13.3% on a reported and constant currency basis.

Excluding the acquisition of Gracenote, Audience Measurement of Video and Text revenues increased 6.1% on a reported and constant currency basis primarily due to Nielsen’s ongoing investments and continued client adoption of its Total Audience Measurement system.

Audio revenues were flat for the quarter.

Marketing Effectiveness revenues increased by 12.1%, or 14% on a constant currency basis, driven by Nielsen’s investments in our product portfolio. Other Watch revenues increased 11.4%, or 14% on a constant currency basis, due to the timing of data sales during Q1.

Meanwhile, Nielsen also announced that its Board of Directors approved an increase in the company’s quarterly dividend of 10%, to $0.34 per share.

That didn’t seem to quell shareholders, who sent Nielsen shares to their lowest close since October 2013.