Nielsen's Stock Dives 25%, Declining Revenues At Buy Unit

Somewhat under the radar in light of Facebook’s big stock market 20% tumble, Nielsen Holdings on the same day witnessed its stock closing down a massive 25% to $22.11 on Thursday due to weak second-quarter financial results.

Nielsen posted a 4.1% decline in revenues to $789 million for its Buy unit. In addition, the company said its Buy unit it will be “conducting an in-depth strategic review,” which analysts believe could involve divestitures.

This comes with the announcement that Mitch Barns will be retiring as CEO by the end of the year. James Attwood, current chairman of the board, has been named executive chairman. Nielsen's board has begun a search for a new chief executive.

Total second-quarter revenues only inched up 0.2% to $1.65 billion, with net income down 45% to $72 million -- under expectations. The company says there was issues around “softer revenues, higher restructuring charges, retailer investments.”



Nielsen also noted weakness at the Buy unit in developed markets, “due to increased pressure on spending from large multinational clients.”

Nielsen’s other big business, its media measurement division Watch, grew 4.5% to $858 million in the second quarter.

Under Watch, Nielsen says Audience Measurement (video and text) was 7.4% higher to $609 million. Nielsen says there was more client business for its Total Audience Measurement system, as well as positive results from its Gracenote unit. Audio revenues were flat for the quarter.

Also under Watch, the company’s Marketing Effectiveness business was 7% higher to $89 million. These results were partly offset by the impact of the General Data Protection Regulation (GDPR) and other consumer data privacy considerations.

Brian Wieser, senior research analyst for Pivotal Research Group, said: “Investors are understandably concerned about the degree to which management anticipated the accelerated weakness in Buy and the impact of GDPR on Watch-segment revenues from Marketing Effectiveness products.

“While traditional TV ratings retain their durable position, much of the value proposition behind the rest of company is effectively in limbo with new concerns on data used by Nielsen in digital advertising products,” he added.

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