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Nielsen Reports Higher Net Income in First Quarter

Nielsen reported higher earnings in the first quarter, with higher revenues from its media measurement business.

Net income rose 1.4% to $72 million, or 20 cents a share, from $71 million, or 20 cents a share a year ago.

Revenue rose 5.5% to $1.6 billion.

For Nielsen’s Watch segment, which includes its media measurement and ratings business, revenue increased 8.5% to $834 million. Audience measurement of video and text revenues rose 12%. Marketing effectiveness revenue rose 24.6%.

Reflecting the impact of the new tax laws, the company increased its guidance for net income per share for 2018. It now says net income will be in the $1.50 to $1.56 per share range, compared to the $1.40 to $1.46 range earlier. The company said it still expects revenues to rise 3%.

“In the first quarter, we continued to execute on our key initiatives while focusing on our Path to 2020 objectives. Through continuous innovation, we are transforming our business in three major areas, Watch, Buy, and Operations, to drive a faster growing, higher margin business and create incremental value for our shareholders,” said CEO Mitch Barns.

“Watch had another great quarter with growth driven by Total Audience Measurement. Our ability to provide independent, comparable measurement to the industry is pivotal as media and audiences continue to fragment,” Barnes said. “In our Buy business, Developed Markets continued to see pressure in the fast moving consumer goods industry in the U.S., but we are confident that our investments in the Connected System, Total Consumer Measurement, and retailer partnerships will drive improved results despite this environment.”

Reacting to the earnings release, analyst Todd Juenger of Sanford C. Bernstein suggested the company might be better off without the Buy unit.

“”Why not sell Buy, reduce debt, and be left with Watch: a faster growing, higher ROIC business with a strong competitive moat,” he asked in a research note.

“Who would be a buyer for Buy? Perhaps an agency holding company who wants a data advantage. Perhaps private equity – who might embark on a roll-up with IRI, GfK, or others,” he added.