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Nielsen (NLSN) Surpasses Q3 Earnings and Revenue Estimates

Nielsen's (NLSN) third-quarter results benefit from Audience Measurement, and the Outcomes and Content segments.

This story originally appeared on Zacks

Nielsen Holdings NLSN has reported third-quarter 2021 adjusted earnings of 45 cents per share, which beat the Zacks Consensus Estimate by 25% and grew 7.1% year over year.

Total revenues were $882 million, up 6.2% year over year. The figure surpassed the consensus mark of $869 million.

On a constant-currency basis, revenues increased 5.1% year over year. Further, the figure rose 5.5% and 6.6% from the year-ago quarter on a reported and organic basis, respectively.

A solid momentum across Audience Measurement as well as Outcomes and Content drove top-line growth in the reported quarter.

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Nielsen Holdings Plc Price, Consensus and EPS Surprise

Nielsen Holdings Plc Price, Consensus and EPS Surprise

Nielsen Holdings Plc price-consensus-eps-surprise-chart | Nielsen Holdings Plc Quote

Top-Line Detail

In the third quarter, Audience Measurement revenues rose 3.9% year over year to $637 million (73.1% of total revenues). This was primarily attributed to the strength across national and digital measurement categories

Outcomes and Content revenues increased 9.9% to $245 million (26.9% of the total revenues), driven by the improving Sports business, robust growth in Content and growing short-cycle revenues.

Operating Details

Adjusted EBITDA increased 2.1% year over year to $382 million. Adjusted EBITDA margin contracted 143 basis points (bps) to 43.3% in the reported quarter.

Nielsen’s selling, general and administrative expenses were $218 million, increasing 30.5% year over year.

Operating income was $222 million, which remained flat year over year. As a percentage of revenues, the figure contracted 140 bps year over year to 25.2%.

Balance Sheet & Cash Flow

As of Sep 30, 2021, the cash and cash equivalent balance was $542 million, down from $410 as of Jun 30, 2021.

As of Sep 30, 2021, gross debt was $5.8 billion, resulting in net debt (gross debt minus cash and cash equivalents) of $5.3 billion.

The company generated $271 million of cash from operations compared with $213 million in the previous quarter.

Its free cash flow was $201 million in the third quarter.

2021 Guidance

For 2021, the company revised the revenue growth guidance from 2.5-3% to 3-3.25%. Organic revenue growth guidance was also revised from 4-4.5% to 4.5-4.75%. The Zacks Consensus Estimate for 2021 revenues is pegged at $3.49 billion.

The company raised the adjusted earnings guidance from $1.54-$1.61 per share to $1.65-$1.70. The consensus mark for the same is pegged at $1.59 per share.

Nielsen revised the guidance for Adjusted EBITDA from $1.475-$1.490 billion to $1.48-$1.49 billion.

Zacks Rank & Stocks to Consider

Currently, Nielsen has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Trimble TRMB, Semtech Corp. SMTC and Apple AAPL, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for Trimble, Semtech, and Apple are currently projected at 10%, 12.5%, and 12.5%, respectively.

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