What's In Store For Nielsen (NLSN) This Earnings Season?

Nielsen Holdings plc (NYSE:NLSN) is set to report fourth-quarter 2017 results on Feb 8. Last quarter, the company delivered a negative earnings surprise of 8.82%.

Notably, Nielsen missed the Zacks Consensus Estimate in each of the trailing four quarters, with an average negative surprise of 28.03%.

Also, shares of Nielsen have lost 10.7% year to date, underperforming the industry’s 25.6% rally.

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

Watch Segment Strength to Drive Revenues

In the third quarter, Watch business revenues of $838 million contributed 51% to the total top line and were up 10.1% on a year-over-year basis. This figure is expected to increase in the to-be-reported quarter driven by continued strength in Audience Measurement and Marketing Effectiveness. The Zacks Consensus Estimate for Watch revenues is currently pegged at $889 million.

Partnerships & Agreements to Boost Results

Nielsen has been partnering with big companies to extend its TV ratings service beyond the Nielsen Local TV Ratings Service. Recently the company entered into a partnership with Clypd, a leading sales side platform for television advertising. The partnership enables advertisers, agencies and publishers to transact using consistently defined audience segments on linier television. Also, the acquisition of Gracenote is likely to bring new capabilities to linier TV ads in partnership with two leading interactive TV advertising providers, Connekt and Ensequence. These partnerships will help Nielsen to expand its client base and boost its revenues in the to-be-reported quarter.

Weakness in the Buy Segment Could Hurt Results

In the third quarter, Buy business revenues of $803 million declined 0.7% year over year and 2.1% on a constant-currency basis. The figure could decrease in the fourth quarter due to challenging consumer goods environment in the U.S. market.

Why a Likely Positive Surprise?

Moreover, our proven model shows that Nielsen is likely to beat earnings due to the favorable combination of a Zacks Rank #3 (Hold) and +1.15% Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Note that stocks with a Zacks Rank #1, 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.

Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

Stocks to Consider

Here are a few stocks you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter.

Applied Materials, Inc. (NASDAQ:AMAT) , with an Earnings ESP of +0.57% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advanced Energy Industries, Inc. (NASDAQ:AEIS) , with an Earnings ESP of +3.77% and a Zacks Rank #2.

Advanced Micro Devices, Inc. (NASDAQ:AMD) , with an Earnings ESP of +8.72% and a Zacks Rank #3.

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