Nielsen Holdings (NYSE:NLSN) tumbled nearly 17% to its lowest point since February after posting Q3 earnings that missed on top and bottom lines as a decline in its Buy segment dampened strong measurement growth.
Revenues grew 2.5% (3.6% in constant currency); net income fell 7% (down 8.3% in constant currency).
“In the Buy segment, while emerging markets continued to produce top-line growth, our results in the developed markets were disappointing, particularly in the U.S.," said CEO Mitch Barns. "Many of our clients are seeking efficiency and productivity in the face of a challenging growth environment. Given these evolving needs, we are realigning our portfolio by exiting non-core services, reallocating resources and accelerating our investments in our strategic initiatives to help our clients grow and to better position our business for the future."
Revenue by segment: Buy, $809M (down 0.9%); Watch, $761M (up 6.4%). In Buy: Developed Markets, $542M (down 3.7%); Emerging Markets, $267M (up 5.5%). In Watch: Audience Measurement, $496M (up 8.3%); Audio, $137M (down 2.8%); Marketing Effectiveness, $87M (up 27.9%); Other Watch, $41M (down 14.6).
It's updated full-year guidance, now expecting revenue growth at 3.5%-4% and adjusted EPS of $2.73-$2.79, below consensus for $2.87. It's forecasting free cash flow of $850M.
In an SEC filing, the company said it added W.W. Grainger President David Rawlinson as a member of the board and the Audit Committee, effective Feb. 8. He'll get an annual retainer of $80,000 and deferred stock annually with fair value of $160,000.
Segments – Services revenue, representing 88% of total revenue, decreased 8.4% to $601M while gross margin in the segment declined 60 bps Y/Y and operating profit declined 220 bps to 2.6%. Services operating profit margin increased sequentially by 50 bps. Technology business revenue, representing 12% of total, remained unchanged on the year ($82M this quarter vs. $83M Q3 2015) while operating profit increased from 20.7% to 32.3%.
Unisys president and CEO Peter Altabef: "Our year-to-date results show progress toward achieving our goals for 2016 with respect to improving operating profit margin and cash flow generation. Revenues also continue to track in line with our full-year guidance for 2016. We continue to execute on the strategy we began in 2015, and we are beginning to see traction with our vertical go-to-market approach, in addition to bringing a pervasive security focus to all of our offerings."
Unisys (NYSE:UIS), closing today 6.7% lower, is presently up over 11% after hours.
Segment revenues – Performance and Security Solutions $345M (+19% Y/Y), Cloud Security Solutions $95M (+46% Y/Y), Media Delivery Solutions $188M (-14% Y/Y), Services and Support Solutions $51M (+17% Y/Y)
Geographic revenues – U.S. $404M (+1% Y/Y), International $180M (+20% Y/Y)
Major division revenues – Media $284M (-4% Y/Y), Web Division $285M (+17% Y/Y), Enterprise and Carrier Division $15M (+43% Y/Y)
CEO Dr. Tom Leighton: "Akamai's strong third quarter revenue and earnings performance was primarily driven by accelerated growth in both our Cloud Security and Web Performance Solutions. As the cyber-attacks from last week demonstrate, enterprises need solutions capable of defending against massive botnets that are exploiting millions of online devices. This is an area where Akamai's unique architecture and ongoing investments in global scale and security innovation continue to make a critical difference."