Why Nielsen’s Q4 Results Missed The Mark


It was a good news, bad news fourth quarter for Nielsen.

Here’s the good news: Revenue increased to $1.656 billion in the most recent quarter, from $1.624 billion in Q4 2015.

Seven analysts surveyed by Zacks Equity Research predicted Q4 ’16 revenue of $1.65 billion.

Nielsen1Now, the bad news: Nielsen’s Q4 net income attributable to Nielsen shareholders slipped from $251 million (68 cents per diluted share) to $159 million (44 cents). That’s a 36.7% year-over-year decline.

To say the income results did not meet Wall Street expectations is an understatement: The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 80 cents per share.

Nevertheless, investors seem pleased with the revenue growth. At the Closing Bell on Wall Street Thursday, Nielsen shares were up 2.7%, to $43.18

For the full-year of 2016, Nielsen saw its profit dip from $570 million ($1.54 per diluted share) to $502 million ($1.39).

Full-year revenue was reported as $6.31 billion, compared to $6.17 billion in fiscal 2015.

Overall, Zacks is not overly concerned about Nielsen in the long term.

“Continued dividend payment and share repurchase reflect Nielsen’s financial strength and commitment to return value to its shareholders,” it said. “Also, the company’s product launches are progressing well and should drive revenues in the near term.”

However, it added, continued investments in technology and infrastructure could weigh on margins and profitability, going forward.

Commenting on his company’s Q4 results, Nielsen CEO Mitch Barns said, “While 2016 was a challenging year, our results reflect the resiliency of our business. We remain focused on our key strategic initiatives, and we continue to drive productivity and efficiency in our operations.”

In our Watch segment, Nielsen’s Total Audience Measurement initiative “continued to excel,” he noted. “We saw significant growth in adoption of its many components by both media buyers and sellers. With the approach of the 2017 Upfronts, our Total Audience system is ready to play a key role for our clients.”

Meanwhile, in Nielsen’s Buy segment, emerging markets continued to deliver “solid growth.” But, in developed markets, especially in the U.S., trends in the fast-moving consumer goods industry put pressure on our business.

“In response, we’ve accelerated investment in our Connected System initiative, designed to drive speed and efficiency for our clients,” Barns said. “We expect this to lead to a stronger, higher margin business for Nielsen over time.”

Q4 Audience Measurement (video and text) for Nielsen fell to $519 million, from $479 million, while Audio dollars slipped to $120 million, from $122 million.