Nielsen Nails Profit Forecasts for Q3, Just Shy on Revenue

CEO Mitch Barns touts Digital Content Ratings rollout as a “move toward a new definition of the currency ratings”

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Nielsen nailed external net income expectations in the third quarter of 2015, and boss Mitch Barns is pleased with the way his Digital Content Ratings have rolled out in their early stages.

The TV ratings giant reported adjusted earnings per share (EPS) of $0.69 on net income of $142 million. Revenue was $1.53 billion, just shy of the anticipated mark. Wall Street had forecast that exact same EPS on revenue of $1.54 billion, per Yahoo Finance. Zachs saw the EPS coming in three cents lower.

Nielsen could use the good news, as its competition is coming. Last month, ComScore bought Rentrak, bringing two big Nielsen competitors together.

ComScore measures consumer web activity while Rentrak measures set-top box data. The two combined companies will create a more robust competitor for Nielsen, which is trying to expand beyond its traditional television ratings to a broader suite of products measuring viewership across multiple platforms.

Barns commented on the digital effort in the Q3 earnings materials.

“Nielsen’s third quarter results exemplify our strong value-generating business model with revenue growth of 5 percent, consistent margin expansion across both our Watch and Buy businesses on a constant currency basis, and record quarterly free cash flow generation, up 19 percent over last year.” said the CEO. “Our growth was driven by many important competitive wins all over the world.”

The Buy business was up 4.1 percent; The Watch segment rose 6.1 percent, both per constant currency.

“The initial release of Digital Content Ratings has gone smoothly and we’re pleased with the feedback we’ve received as it is the final piece of our Total Audience Measurement framework,” Barns continued. “We know how important the execution of our product roadmap and the subsequent industry adoption of our solutions is to our ability to drive value for our clients and we feel very confident about our progress here.”

“As our products continue to gain traction, we’re having meaningful conversations with clients and major industry voices in order to move toward a new definition of the currency ratings,” the Nielsen chief concluded his prepared remarks.

NLSN stock closed Tuesday at $48.53 per share, up $0.35 — or 0.73 percent — from the prior day.

Speaking of those shares, the company repurchased $173 million of its stock during Q3, which brings the year-to-date total to $493 million. Nielsen has a total of $530 million remaining for repurchase under the existing program, which it anticipates utilizing by mid-2016.

A call for investors and market analysts is scheduled for 8 a.m. ET on Wednesday. Those selected to ask questions to Nielsen executives will likely push Barns and co. on the newly combined ComScore-Rentrak competition, a scary proposition for the company that darn-near monopolized TV ratings — especially considering all the flaws of the current system.


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