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Will Nielsen's (NLSN) Earnings Disappoint Estimates in Q3?

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Nielsen Holdings N.V.NLSN is set to report third-quarter 2015 results on Oct 21. Last quarter, the company posted a positive earnings surprise of 5.00%. Moreover, it has surpassed the Zacks Consensus Estimate in the last four quarters, with an average earnings surprise of 3.39%.

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

Factors at Play

Nielsen reported decent second-quarter results, with both the top line and the bottom line exceeding the respective Zacks Consensus Estimate.

The continuous dividend payment and the share repurchase program reflect Nielsen's financial strength and commitment to return value to shareholders. Also, the company's product launches are progressing well and should drive revenues in the third quarter.

However, continued investments in technology and infrastructure could weigh on margins and profitability in the to-be-reported quarter and beyond.

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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 66 cents. Therefore, the Earnings ESP is 0.00%.

Zacks Rank: Nielsen carries a Zacks Rank #3 which when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stock to Consider

Here are some companies which you may consider instead, as our model shows they have the right combination of elements to post an earnings beat this quarter:

Amgen Inc. AMGN , with an Earnings ESP of +2.11% and a Zacks Rank #1.

Anika Therapeutics Inc. ANIK , with an Earnings ESP of +2.94% and a Zacks Rank #1.

SkyWest Inc. SKYW , with an Earnings ESP of +4.55% and a Zacks Rank #1.

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AMGEN INC (AMGN): Free Stock Analysis Report

SKYWEST INC (SKYW): Free Stock Analysis Report

NIELSEN HOLDNGS (NLSN): Free Stock Analysis Report

ANIKA THERAPEUT (ANIK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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