World Wrestling Entertainment (WWE) Beats On Q2 Earnings
Zacks Investment Research | Jul 24, 2019 11:35PM ET
After reporting wider-than-expected loss in the first quarter of 2019, World Wrestling Entertainment, Inc. (NYSE:WWE) swung back to profit in the second quarter. However, net revenues fell short of the Zacks Consensus Estimate for the second quarter in row. Also, both the top and bottom lines came below the prior-year period.
This integrated media and entertainment company reported earnings of 11 cents a share as against the Zacks Consensus Estimate of loss of 3 cents. The company had reported adjusted earnings of 14 cents a share in the year-ago period. The company’s bottom line was favorably impacted by lower operating expenses, fall in marketing and selling expenses, dip in general and administrative expenses and reduced interest and tax expenses.
WWE’s revenues of $268.9 million missed the Zacks Consensus Estimate of $277.2 million and fell 5% year over year. Management pointed that lower revenue from the Media, Live Events and Consumer Products business segments hurt the top line.
Nevertheless, management continues to anticipate record revenue of approximately $1 billion for 2019. Clearly, the company’s effort to focus on increasing original content production, localization and strategic initiatives as well as digitization and international development bode well.
Total adjusted OIBDA came in at $34.6 million, exceeding the company’s guided range of $19-$24 million. This can be attributed to revenue recognized in relation with recent event in Saudi Arabia. However, the metric fell sharply from adjusted OIBDA of $43.5 million reported in the year-ago quarter. Meanwhile, adjusted OIBDA margin for this Zacks Rank #5 (Strong Sell) company contracted to 13% from 15% in the prior-year period.
Without any doubt management is strengthening and expanding WWE Network through creation of new content along with implementation of programs which will have higher customer attraction and retention power. Further, the introduction of new features, expansion of distribution platforms and foraying into new regions will aid the drive. The company is increasing the monetization of WWE content worldwide. The company recently entered into content distribution deals with BT Sport in the U.K., Fox Sports in Latin America and PP Sports in China.
With revenue expected to increase considerably courtesy of new U.S. content distribution agreements and media rights deal in the MENA region, management is aiming to attain adjusted OIBDA of at least $200 million for 2019, up at least 12% from adjusted OIBDA of $178.9 million in 2018. The company now anticipates third quarter adjusted OIBDA in the band $17-$22 million.
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