Nielsen Holdings plc NLSN reported second-quarter 2020 adjusted net earnings of 41 cents per share, which surpassed the Zacks Consensus Estimate of 29 cents. However, the bottom line was down 22.6% from the year-ago quarter.
Total revenues came in at $1.5 billion, which declined 8.1% year over year. Also, the figure declined 5.9% on a constant-currency basis.
However, the top line surpassed the Zacks Consensus Estimate of $1.48 billion.
Nielsen Global Media: The company generated revenues of $811 million (accounting for 54% of total revenues) from this segment, reflecting an decline of 5.3% from the year-ago level or 4.6% on a constant-currency basis.
We note that Audience Measurement revenues decreased 3.1% year over year to $603 million, reflecting the impact of the COVID-19 pandemic on sports and non-contracted revenues. Also, pressure in local television measurement attributed to the downfall.
Further, Plan/Optimize revenues were $208 million, which decreased 11.1% year over year due to the COVID-19 pandemic.
Nielsen Global Connect: The company generated revenues of $685 million (46% of total revenues), reflecting an 11.3% decline from the year-ago period. Also, the figure decreased 7.4% on a constant-currency basis.
Revenues in Measure came in at $495 million, decreasing 9.3% year over year. Further, Predict/Activate revenues decreased 15.9% from the year-ago quarter to $190 million.
Nielsen Holdings Plc Price, Consensus and EPS Surprise
Nielsen Holdings Plc price-consensus-eps-surprise-chart | Nielsen Holdings Plc Quote
Adjusted EBITDA was $426 million for the second quarter, down 9.4% from the prior-year level. Adjusted EBITDA margin contracted 39 basis points (bps) to 28.5%. The decrease reflected weakness in both the segments due to the COVID-19 pandemic and increased investments in Media, partially offset by cost savings.
Nielsen’s selling, general and administrative expenses were $451 million, decreasing 6.6% from the year-ago figure. As a percentage of revenues, the figure expanded 40 bps year over year to 30.1%.
Operating income was ($64) million for the quarter. In the year-ago quarter, operating income was $149 million.
Balance Sheet & Cash Flow
As of Jun 30, 2020, cash and cash equivalent balance was $438 million, up from $359 million on Mar 31, 2020.
At second quarter-end, gross debt was $8.42 billion compared with $8.41 billion at the end of the prior quarter. Net debt (gross debt excluding cash and cash equivalents) was $7.98 billion and net debt leverage ratio was 4.46 at the end of the reported quarter.
Cash flow from operations increased to $250 million from ($5) million in the first quarter. Further, capex totaled $120 million and free cash flow amounted to $130 million for the second quarter.
The company updated its 2020 guidance.
It has narrowed 2020 revenue expectation on a constant-currency basis. Revenues are expected to decline in the range of 2-4% from the previous expectation of 1-4% fall.
Further, adjusted earnings are expected between $1.50 and $1.62 per share versus prior expectation of $1.43-$1.58.
Adjusted EBITDA is anticipated in the range of $1.800-$1.860 billion versus $1.790-$1.860 billion projected earlier. Adjusted EBTDA margin is expected between 29% and 30% versus earlier expectation of 28.5-29.5%.
Additionally, Nielsen expects free cash flow in the range of $480-$530 million versus prior projection of $460-$530 million.
Zacks Rank & Key Picks
Nielsen currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Dropbox DBX, MercadoLibre, Inc. MELI and Analog Devices ADI. While Dropbox sports a Zacks Rank #1 (Strong Buy), Analog Devices and MercadoLibre carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Both Dropbox and MercadoLibre are scheduled to report quarterly earnings on Aug 6. Analog Devices is set to release quarterly results on Aug 19.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Analog Devices, Inc. (ADI) : Free Stock Analysis Report
Nielsen Holdings Plc (NLSN) : Free Stock Analysis Report
MercadoLibre, Inc. (MELI) : Free Stock Analysis Report
Dropbox, Inc. (DBX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research