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Nielsen (NLSN) to Report Q4 Earnings: What's in the Offing?

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Nielsen Holdings is set to report fourth-quarter 2018 results on Feb 28.

The company missed estimates in each of the trailing four quarters, recording average negative earnings surprise of 26.51%. In the last reported quarter, its earnings lagged the Zacks Consensus Estimate by 4 cents.

Third-quarter 2018 reported revenues came in at $1.60 billion, surpassing the Zacks Consensus Estimate of $1.58 billion but decreasing 0.6% (on a constant-currency basis) from the year-ago period.

The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $1.64 billion. Moreover, the consensus mark for earnings has remained steady at 56 cents over the past 30 days.

Let’s see how things are shaping up prior to this announcement.

Key Factors to Consider

Nielsen is strengthening its presence in the advertising market through strategic partnerships withCox Media, Raycom and CBS, among others. The company’s ongoing investments in innovative technologies are driving portfolio expansion.

During the quarter, Nielsen renewed its agreement with Cox Media Group for television and audio measurement services. Per the new agreement, the media company is entitled to receive Nielsen’s service for all its local television and radio stations.

Nielsen’s measurement services continue to gain traction among TV and media companies. This is likely to accelerate adoption rate, thereby increasing its Watch segment revenues.

During the quarter, the company’s client, CBS Corporation (CBS) renewed the agreement for Total Audience measurement services. The deal bodes well for Nielsen, which was accused of inaccurately measuring audiences in the multiplatform universe.

Apart from the said deal, the company witnessed contract renewal by Raycom Media. Per the renewed contract, Raycom will utilize Nielsen’s television ratings for the purpose of audience measurement across many stations like WBTV-Charlotte, WBRC-Birmingham, WXIX-Cincinnati, WMC-Memphis, WVUE-New Orleans, WFLX-West Palm Beach, to name a few.

However, weakness in the U.S. Buy segment and sluggish growth in emerging markets are expected to hurt top-line growth in the to-be-reported quarter. The company is expected to suffer from weakness in multinational client spending in markets like Southeast Asia and China.

Mounting competition in the digital space poses a major threat to Nielsen’s market position.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Nielsen has a Zacks Rank #3 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few stocks you may consider as our proven model shows that these have the right combination of elements to post an earnings beat in the upcoming releases.

Xencor, Inc. (XNCR - Free Report) has an Earnings ESP of +8.86% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Square, Inc. (SQ - Free Report) has an Earnings ESP of +5.95% and a Zacks Rank #2.

Gogo Inc. (GOGO - Free Report) has an Earnings ESP of +13.60% and a Zacks Rank #1.

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