It has been about a month since the last earnings report for World Wrestling Entertainment, Inc. . Shares have lost about 3.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
World Wrestling Q4 Earnings in-Line, Revenues Beat
World Wrestling Entertainment reported mixed results for the fourth quarter of 2016. The company reported earnings of $0.10, in line with the Zacks Consensus Estimate but increased 150% year over year.
WWE’s revenues of $194.9 million came in above the Zacks Consensus Estimate of $179 million and jumped 17.3% year over year primarily on the back of 22.7% increase in revenue in North America. Further, revenues from outside North America gained 5% buoyed by growth of WWE Network subscribers and due to the performance of Live Events, mainly in the APAC and Latin America.
The number of paid average subscribers increased 14% in fourth-quarter 2016 to more than 1.41 million. Further, WWE Network is available in the Indian Subcontinent, Germany, Malaysia, Austria, Switzerland and Japan.
Revenues from North America jumped 23% to $141.6 million, while revenues from Europe/Middle East/Africa (EMEA) declined 7.8% to $34.2 million. The Asia Pacific (APAC) and Latin America generated revenues of $13.4 million and $5.7 million, which represent a gain of 21.8% and 111.1%, respectively.
Management is strengthening and expanding WWE Network through the creation of new content, implementation of programs which will have higher customer attraction and retention power, introduction of new features, expansion of distribution platforms along with foraying into new regions.
Segmental details:
Media Division: Revenues from the company’s Media division increased 17% to $125 million, mainly owing to effect of certain television programming, increase in contractual television right fees and also due to growth registered in WWE Network Subscribers. Network revenues were up 7% to $43.7 million and Digital Media revenues climbed 11.8% to $8.5 million. Moreover, Television and Home Entertainment revenues came in at $68.6 million and $4.2 million, up 23.4% and 61.5%, respectively. Increase in Network revenues were primarily due to advance of 11% in subscription revenues.
Live Events: Revenues from Live Events climbed 17% to $38.6 million driven by 21 additional events which were held during the reported quarter. A total of 103 events took place in the fourth quarter, which includes 75 events in North America and 28 internationally. In the prior-year quarter, there were 82 events in total, including 56 in North America and 26 globally. North-American live event revenues came in at $22.8 million, up 23% year over year. While International live event revenues went up 10% year over year to $15.8 million.
Consumer Product Division: This segment’s revenues were up 16% to $27.8 million, primarily due to increase in online sales of merchandise at WWE eCommerce sites.
WWE Studios: This segment reported revenue growth of 33.3% of $2.4 million.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $212 million, long-term debt of $35.6 million and shareholders’ equity of $239.8 million. At the end of the third quarter, the company had free cash flow of $30.9 million compared with a $13.5 million in the year-ago quarter.
First-Quarter 2017 Outlook
For first-quarter 2017, WWE anticipates average paid subscribers of 1.48 million, signifying a year-over-year increase of nearly 15% and 5% sequentially. Adjusted OBIDA is projected in the range of $23–$27 million.
2017 Outlook
Management is optimistic about achieving another great year of revenues and adjusted OIBDA growth. The company is targeting adjusted OIBDA of $100 million, which is nearly 25% up from the 2016. Operating income is likely to be $70 million.
Further, WWE expects contractual rise in television right fees from important distribution agreements and believes that the company will continue to add more WWE Network subscribers but at a lower rate on a year-over-year basis.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, World Wrestling's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.
Image: Bigstock
World Wrestling (WWE) Down 3.3% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for World Wrestling Entertainment, Inc. . Shares have lost about 3.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
World Wrestling Q4 Earnings in-Line, Revenues Beat
World Wrestling Entertainment reported mixed results for the fourth quarter of 2016. The company reported earnings of $0.10, in line with the Zacks Consensus Estimate but increased 150% year over year.
WWE’s revenues of $194.9 million came in above the Zacks Consensus Estimate of $179 million and jumped 17.3% year over year primarily on the back of 22.7% increase in revenue in North America. Further, revenues from outside North America gained 5% buoyed by growth of WWE Network subscribers and due to the performance of Live Events, mainly in the APAC and Latin America.
The number of paid average subscribers increased 14% in fourth-quarter 2016 to more than 1.41 million. Further, WWE Network is available in the Indian Subcontinent, Germany, Malaysia, Austria, Switzerland and Japan.
Revenues from North America jumped 23% to $141.6 million, while revenues from Europe/Middle East/Africa (EMEA) declined 7.8% to $34.2 million. The Asia Pacific (APAC) and Latin America generated revenues of $13.4 million and $5.7 million, which represent a gain of 21.8% and 111.1%, respectively.
Management is strengthening and expanding WWE Network through the creation of new content, implementation of programs which will have higher customer attraction and retention power, introduction of new features, expansion of distribution platforms along with foraying into new regions.
Segmental details:
Media Division: Revenues from the company’s Media division increased 17% to $125 million, mainly owing to effect of certain television programming, increase in contractual television right fees and also due to growth registered in WWE Network Subscribers. Network revenues were up 7% to $43.7 million and Digital Media revenues climbed 11.8% to $8.5 million. Moreover, Television and Home Entertainment revenues came in at $68.6 million and $4.2 million, up 23.4% and 61.5%, respectively. Increase in Network revenues were primarily due to advance of 11% in subscription revenues.
Live Events: Revenues from Live Events climbed 17% to $38.6 million driven by 21 additional events which were held during the reported quarter. A total of 103 events took place in the fourth quarter, which includes 75 events in North America and 28 internationally. In the prior-year quarter, there were 82 events in total, including 56 in North America and 26 globally. North-American live event revenues came in at $22.8 million, up 23% year over year. While International live event revenues went up 10% year over year to $15.8 million.
Consumer Product Division: This segment’s revenues were up 16% to $27.8 million, primarily due to increase in online sales of merchandise at WWE eCommerce sites.
WWE Studios: This segment reported revenue growth of 33.3% of $2.4 million.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $212 million, long-term debt of $35.6 million and shareholders’ equity of $239.8 million. At the end of the third quarter, the company had free cash flow of $30.9 million compared with a $13.5 million in the year-ago quarter.
First-Quarter 2017 Outlook
For first-quarter 2017, WWE anticipates average paid subscribers of 1.48 million, signifying a year-over-year increase of nearly 15% and 5% sequentially. Adjusted OBIDA is projected in the range of $23–$27 million.
2017 Outlook
Management is optimistic about achieving another great year of revenues and adjusted OIBDA growth. The company is targeting adjusted OIBDA of $100 million, which is nearly 25% up from the 2016. Operating income is likely to be $70 million.
Further, WWE expects contractual rise in television right fees from important distribution agreements and believes that the company will continue to add more WWE Network subscribers but at a lower rate on a year-over-year basis.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
World Wrestling Entertainment, Inc. Price and Consensus
World Wrestling Entertainment, Inc. Price and Consensus | World Wrestling Entertainment, Inc. Quote
VGM Scores
At this time, World Wrestling's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.