Nielsen Registers Weak 3Q Financials, Lower Marketing Biz Blamed

Nielsen posted weaker-than-expected quarterly business due to lower revenues from its retail/marketing services business -- and  that hurts its stock price in a big way early on.

Nielsen’s “Buy” business revenue -- its retail-based marketing services -- was up only 0.9% in its fiscal third -quarter 2016 period to $809 million. This was down 4% from what analysts had expected, and pulled down overall revenue growth, which rose 2.5% to $1.57 billion during the period. Net income slipped 7% to $132 million from $142 million.

Early-day trading of Nielsen’s stock was down sharply -- 14.5% to $47.14.

Concerning its Buy division, Mitch Barns, CEO of Nielsen, said in the company’s financial release: “Our results in the developed markets were disappointing, particularly in the U.S. Many of our clients are seeking efficiency and productivity in the face of a challenging growth environment.”

Still, Nielsen “Watch” business -- TV-media audience measurement services -- grew a big 6.4% to $761 million. Much of this came from Nielsen’s new Digital Content Ratings and Total Content Ratings services, under its Total Audience Measurement system umbrella.

advertisement

advertisement

Barns said these services “were well-positioned to play an important role in the 2017 upfronts.”

Nielsen’s Audio revenues decreased 2.8% to $137 million. Nielsen also offered weak guidance on future Buy business activity.

Brian Wieser, senior research analyst for Pivotal Research Group, wrote: “The challenges facing Buy businesses – especially in the U.S., where margins are relatively high -- and with the 30% of that segment’s revenue base that counts [it] as discretionary spending – have proven to be difficult to overcome, and it appears a meaningful turnaround may be some ways away.”

Next story loading loading..