Nielsen Q4: revenues up, profits down


NielsenNielsen Holdings reported a Q4 profit on 2/12 that was around half of last year for the quarter, reflecting higher expenses and charges. However, adjusted earnings per share topped analysts’ expectations. Quarterly revenues were just under analysts’ estimates.

“Nielsen’s fourth quarter results showed strong growth in recurring revenue and continued margin expansion,” CEO David Calhoun said.

Nielsen reported net income of $39 million or $0.11 per share in Q4, lower than $95 million or $0.26 per share in Q4 2011.

Adjusted net income for the quarter was $234 million or $0.62 per share, compared to $190 million or $0.51 per share in the year-ago quarter.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.58 per share for the quarter.

Revenues for the quarter rose 3% (or 4% in constant currency), to $1.46 billion from $1.42 billion in the same quarter last year, but missed Wall Street analysts’ consensus estimate of $1.48 billion.

Nielsen says its revenue increase was due to a 3% increase within buy segment, and a 5% increase within watch segment, partially offset by a 19% decline in its expositions segment.

For fiscal 2012, the company reported net income of $273 million or $0.75 per share, higher than $84 million or $0.24 per share in the prior year. Excluding items, adjusted net income was $704 million or $1.87 per share, compared to $590 million or $1.61 per share in the year ago. FY revenues rose 1% or 4% in constant currency, to $5.61 billion from $5.53 billion in the previous year.

Analysts were looking for full-year 2012 earnings of $1.83 per share on annual revenues of $5.63 billion.

“Our full year performance demonstrated the overall resilience of our business despite a tougher environment for corporate spending,” said Calhoun. “We remain focused on delivering value to clients, investing to grow our business and expanding our capabilities. We are pleased to deliver enhanced shareholder value as we begin paying a quarterly dividend.”

On 12/17/12, Nielsen signed an agreement to acquire Arbitron for $48 per share in cash. The transaction has been approved by the boards of both companies and is subject to customary closing conditions, including regulatory review.

RBR-TVBR observation: There was a bit of a delay earlier this month in Nielsen’s acquisition of Arbitron. After conversations with the FTC, both companies agreed to give the regulatory body more time to review. Arbitron expected the deal to close as early as 3/15. Of course, both Arbitron and Nielsen were advised by numerous law firms previous to the announcement, which said there were minimal anti-trust concerns—mainly due to the fact that their core businesses differ from each other. One problem is that both companies are developing cross-platform measurement systems, which could create a bit of a monopoly in that space.

The acquisition could impact the media buying biz to some degree. Agencies need Arbitron ratings to buy and sell radio. If Nielsen gains control of the data, the concern is it may sell it in packages with TV and other products, causing agencies to pay more for radio data than they do now. Calhoun said in December that wouldn’t be the case and we doubt it will be the case, either.

Nonetheless, if this deal gets shut down, Nielsen reportedly faces at least a $125 million break-up fee and that would impact earnings down the road.