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Nielsen shares slump after profits miss

Tuesday, October 25, 2016 7:29
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Nielsen Holdings (NYSE:NLSN) shares slumped as much as 16% on Tuesday after the media-ratings firm found itself the focus of attention when it said profit slipped in its latest quarter in part because of the near doubling of restructuring charges.

The company, which has struggled to remain relevant as new forms of consumer viewing emerged, missed Wall Street expectations for earnings and revenue for the quarter ended Sept. 30.

For the period, restructuring charges hit $29mln, up from $15mln a year earlier. At the same time, profit for the period slipped to $132mln from $142mln.

The company also dropped its annual guidance for adjusted net income on a per-share basis to a range of $2.73 to $2.79 per share, down from a previous range of $2.83 to $2.93. A Thomson Reuters analysts forecast was for $2.87. The company said it now expects free cash flow for the year to come in at $850mln – a decline from the previous estimate of $950mln.

The company which made its name cranking out ratings from a panel of sample households, used by networks and advertisers to determine the value of television commercials and the popularity of shows, has often been criticised for its slow uptake of modern methods used to track television audiences.

These days audiences no longer have to be sitting on their couch to catch up on their favourite TV shows. As a result, some TV executives and analysts consider the audience measurement service to be “outdated” or even “inaccurate.”

Nielsen tries to play “catch-up” with catch-up audiences

Nielsen has tried to hit back by launching its “total audience measurement” framework that tracks viewership across live TV, DVRs, streaming devices and video on demand, but it is early days.

What isn’t early days is the take-up of “on-demand” or “catch-up” services which are growing ever more popular with the busy modern lifestyles of audiences.

The company said on Monday it is augmenting its offering with a new out-of-home ratings service that will help national TV clients track the number of people watching something like a sporting event or a presidential debate anywhere from a bar or restaurant to a hotel, or even while working out at a gym.

The announcement marks a big step for Nielsen as the company tries to present its clients with a well-rounded picture of how many people are watching a particular programme, no matter where or how they’re watching.

Nielsen said the service, which will launch in April 2017 with data going back to January 2017, would use what the company calls portable people meters (PPMs) to track out-of-home viewing statistics. Nielsen’s PPMs are small, pager-like devices worn by participating consumers that can pick up on audio to track what, when, and where the person wearing is watching on TV. The company said last month that it now has more than 75,000 panelists using the PPM devices across 44 local TV markets in the U.S.

Essentially, this still means gauging from a representative sample the TV habits of a nation.

Nielsen shares were last seen down 14.3% to $47.10 on Tuesday.

Story by ProactiveInvestors


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