Nielsen Holdings N.V. NLSN is set to report first-quarter 2015 results on Apr 22. Last quarter, it posted a 5.3% positive earnings surprise. Let’s see how things are shaping up for this announcement.
Factors at Play
The company’s fourth-quarter earnings of 64 cents per share beat the Zacks Consensus Estimate backed by higher revenues and margin expansion. Revenues increased 1.4% year over year to $1.63 billion, backed by higher demand for the company's analytics services and growth in retail and audience measurement business.
Gross margins came in at 60%, up 130 basis points from the comparable year-ago quarter. Also, Nielsen’s operating expenses decreased 5% year over year to $672.0 million due to solid cost management.
Nielsen’s continuous effort to increase its geographic reach requires it to maintain uniformity and integrity of information and fundamental processes on an international scale. Moreover, the company continues to invest in technology and infrastructure to keep pace with clients’ demands and gain a competitive advantage. However, continued investments in technology and infrastructure could weigh on first-quarter margins.
Earnings Whispers
Our proven model does not conclusively show that Nielsen Holdings is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: The Most Accurate estimate stands at 42 cents, while the Zacks Consensus Estimate is pegged higher at 44 cents. Hence, the difference is -4.55%.
Zacks Rank: Nielsen carries a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
Valeant Pharmaceuticals International, Inc. VRX, with an Earnings ESP of +0.43% and a Zacks Rank #1 (Strong Buy).
Laboratory Corp. of America Holdings LH, with an Earnings ESP of +0.61% and a Zacks Rank #1.
Popular, Inc. BPOP, with an Earnings ESP of +9.86% and a Zacks Rank #1
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
Be the first to comment