It has been about a month since the last earnings report for World Wrestling Entertainment, Inc. . Shares have added about 5.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 Misses on Q1 Earnings, Stock Down
World Wrestling Entertainment reported mixed results for first-quarter 2017. The company reported adjusted earnings of $0.08, missing the Zacks Consensus Estimate of $0.11 and also declined 55.6% year over year. Notably, the company’s earnings have missed the Zacks Consensus Estimate in three out of the trailing four quarters.
However, WWE’s revenues of $188.4 million came above the Zacks Consensus Estimate of $182 million and jumped 10% year over year primarily on the back of 12% increase in revenues in North America. Further, revenues from outside North America gained 3% buoyed surge in television distribution agreement rights fees mainly in Asia Pacific (APAC) region.
The number of average paid subscribers increased 16% in first-quarter 2017 to 1.49 million. Further, WWE Network is available in the Indian Subcontinent, Germany, Malaysia, Austria, Switzerland and Japan.
Revenues from North America jumped 12% to $146.2 million, while revenues from Europe/Middle East/Africa (EMEA) declined 4% to $26.6 million. The Asia Pacific (APAC) and Latin America generated revenues of $13 million and $2.6 million, which represent a gain of 12% and 37%, respectively.
Management is strengthening and expanding WWE Network through the 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.
Quick Glance at WrestleMania
A mega event like WrestleMania is considered as the Super Bowl of Sports Entertainment. WWE Network, a subscription-based streaming service launched in 2014, reached a record 1.95 million total subscribers following WrestleMania 33, up 7% from Apr 4 last year. WWE Network subscribers viewed 22.5 million hours during WrestleMania Week compared with 21.7 million hours in 2016.
Per the company, 75,245 fans across all 50 U.S. states and 62 countries flocked to Orlando Citrus Bowl, making it the seventh most attended WrestleMania event. WrestleMania 32 holds the number one spot with an attendance record of 101,763.
Segmental details:
Media Division: Revenues from the company’s Media division increased 8% to $118.6 million, mainly owing to increase in contractual television right fees and also due to growth registered in WWE Network Subscribers. Network revenues were up 15% to $46.5 million and Digital Media revenues climbed 5.6% to $5.7 million. Moreover, Television and Home Entertainment revenues came in at $64 million and $2.4 million, up 5% and down 27%, respectively.
Live Events: Revenues from Live Events advanced 27% to $32.1 million on the back 17 additional events, which were held during the reported quarter. Further, 10% gain in average effective ticket pricing of the company’s events drove the revenue higher. A total of 95 events took place in the first quarter, which includes 91 events in North America and 4 internationally. In the prior-year quarter, there were 78 events in total, including 72 in North America and 6 globally. North-American live event revenues came in at $30.6 million, up 34% year over year. While International live event revenues went down 40% year over year to $1.5 million.
Consumer Product Division: This segment’s revenues were up 5% to $35.1 million, primarily due to increase in online sales of merchandise at WWE eCommerce sites and live events.
WWE Studios: This segment reported revenues decline of 35% of $1.3 million.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $165.6 million, long-term debt of $34.4 million and shareholders’ equity of $240.2 million. In the first quarter, the company had used free cash flow of $1.3 million compared with a $5.2 million in the year-ago quarter.
Second-Quarter 2017 Outlook
For second-quarter 2017, WWE anticipates average paid subscribers of 1.63 million. Adjusted OBIDA is projected in the range of $13–$17 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 up 25% from the 2016.
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.
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
VGM Scores
At this time, the stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated 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 'D'. 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
Why Is World Wrestling (WWE) Up 5.7% Since the Last Earnings Report?
It has been about a month since the last earnings report for World Wrestling Entertainment, Inc. . Shares have added about 5.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 Misses on Q1 Earnings, Stock Down
World Wrestling Entertainment reported mixed results for first-quarter 2017. The company reported adjusted earnings of $0.08, missing the Zacks Consensus Estimate of $0.11 and also declined 55.6% year over year. Notably, the company’s earnings have missed the Zacks Consensus Estimate in three out of the trailing four quarters.
However, WWE’s revenues of $188.4 million came above the Zacks Consensus Estimate of $182 million and jumped 10% year over year primarily on the back of 12% increase in revenues in North America. Further, revenues from outside North America gained 3% buoyed surge in television distribution agreement rights fees mainly in Asia Pacific (APAC) region.
The number of average paid subscribers increased 16% in first-quarter 2017 to 1.49 million. Further, WWE Network is available in the Indian Subcontinent, Germany, Malaysia, Austria, Switzerland and Japan.
Revenues from North America jumped 12% to $146.2 million, while revenues from Europe/Middle East/Africa (EMEA) declined 4% to $26.6 million. The Asia Pacific (APAC) and Latin America generated revenues of $13 million and $2.6 million, which represent a gain of 12% and 37%, respectively.
Management is strengthening and expanding WWE Network through the 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.
Quick Glance at WrestleMania
A mega event like WrestleMania is considered as the Super Bowl of Sports Entertainment. WWE Network, a subscription-based streaming service launched in 2014, reached a record 1.95 million total subscribers following WrestleMania 33, up 7% from Apr 4 last year. WWE Network subscribers viewed 22.5 million hours during WrestleMania Week compared with 21.7 million hours in 2016.
Per the company, 75,245 fans across all 50 U.S. states and 62 countries flocked to Orlando Citrus Bowl, making it the seventh most attended WrestleMania event. WrestleMania 32 holds the number one spot with an attendance record of 101,763.
Segmental details:
Media Division: Revenues from the company’s Media division increased 8% to $118.6 million, mainly owing to increase in contractual television right fees and also due to growth registered in WWE Network Subscribers. Network revenues were up 15% to $46.5 million and Digital Media revenues climbed 5.6% to $5.7 million. Moreover, Television and Home Entertainment revenues came in at $64 million and $2.4 million, up 5% and down 27%, respectively.
Live Events: Revenues from Live Events advanced 27% to $32.1 million on the back 17 additional events, which were held during the reported quarter. Further, 10% gain in average effective ticket pricing of the company’s events drove the revenue higher. A total of 95 events took place in the first quarter, which includes 91 events in North America and 4 internationally. In the prior-year quarter, there were 78 events in total, including 72 in North America and 6 globally. North-American live event revenues came in at $30.6 million, up 34% year over year. While International live event revenues went down 40% year over year to $1.5 million.
Consumer Product Division: This segment’s revenues were up 5% to $35.1 million, primarily due to increase in online sales of merchandise at WWE eCommerce sites and live events.
WWE Studios: This segment reported revenues decline of 35% of $1.3 million.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $165.6 million, long-term debt of $34.4 million and shareholders’ equity of $240.2 million. In the first quarter, the company had used free cash flow of $1.3 million compared with a $5.2 million in the year-ago quarter.
Second-Quarter 2017 Outlook
For second-quarter 2017, WWE anticipates average paid subscribers of 1.63 million. Adjusted OBIDA is projected in the range of $13–$17 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 up 25% from the 2016.
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.
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, the stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated 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 'D'. 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.