Back to top

Analyst Blog

World Wrestling Entertainment Inc. (WWE - Snapshot Report), media and entertainment company, is slated to report its second-quarter 2014 earnings on Jul 31, before the opening bell. In the previous quarter, World Wrestling Entertainment recorded a positive earnings surprise of 38.9%. Let’s see how things are shaping up for this announcement.       

Factors Influencing This Quarter

World Wrestling Entertainment’s previous quarter results were primarily driven by the launch of the WWE Network during the quarter, becoming the first 24/7 streaming network. The company sees it as a vital source of earnings growth in the long run.

However, per the company’s forecast last quarter, its net income is expected to decline this quarter, on a sequential basis. Earnings are expected to fall owing to anticipated profits from WresteMania 30 being more than offset by a seasonal slump in licensing operations, high network expenses and soft home entertainment revenues.

Earnings Whispers

Our proven model does not conclusively show that World Wrestling Entertainment is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below:

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 17 cents.

Zacks Rank: World Wrestling Entertainment carries a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

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

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

Citi Trends, Inc. (CTRN - Analyst Report), Earnings ESP of +6.90% and a Zacks Rank #1 (Strong Buy).

Abercrombie & Fitch Co. (ANF - Analyst Report), Earnings ESP of +18.18% and a Zacks Rank #2 (Buy).

Conns Inc. (CONN - Snapshot Report), Earnings ESP of +2.70% and a Zacks Rank #2.

Please login to Zacks.com or register to post a comment.