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.



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..