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World Wrestling (WWE) Q1 Earnings Surpass, Revenues Miss
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World Wrestling Entertainment Inc. continued with its positive earnings surprise streak in 2018 as well. This integrated media and entertainment company posted first-quarter adjusted earnings of 18 cents a share that beat the Zacks Consensus Estimate of 13 cents, and surged considerably from 8 cents reported in the year-ago period. Clearly, the company’s effort to focus on increasing original content production, localization and strategic initiatives bode well.
WWE’s revenues of $187.7 million came almost flat with the prior-year quarter but fell short of the Zacks Consensus Estimate of $192 million, after surpassing the same in the preceding five quarters. Adoption of a new FASB standard for revenue recognition, ASC Topic 606, lowered the revenues by $10.3 million. On a comparable basis, excluding the impact of the same, revenues rose by 5%.
Total adjusted OBIDA soared roughly 40% to $35.2 million during the quarter reflecting rise in content rights fees, higher sales of advertising and sponsorships, and sturdy performance across WWE Network.
WWE now envisions second-quarter adjusted OIBDA in the range of $30-$34 million compared with $24.3 million reported in the prior-year quarter. The company now projects full year adjusted OIBDA to be at least $150 million (excluding stock-based compensation expense), up from its prior view of at least $145 million. For the first half of 2018, management expects adjusted OBIDA growth in the band of 32-40%.
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.
These efforts have helped this Zacks Rank #2 (Buy) stock to gain 21.3% in the past three months compared with the industry’s decline of 5.7%.
World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise
Media Division: Revenues from the Media division rose 10% to $133.4 million principally due to increase in core content rights fees (up 10.6%), comprising license fees from the distribution of flagship programs Raw and SmackDown, and jump in other content, reflecting the debut of Mixed Match Challenge on Facebook Watch. Rise in sales and advertising sponsorship across media platforms (up 29.8%) and sustained growth of WWE Network (up 3.3%) also positively impacted the results.
The number of average paid subscribers increased 5% year over year in the quarter to 1.56 million. Management now envisions average paid subscribers of approximately 1.77 million for the second quarter, reflecting an increase of 8% from the prior-year period. During the quarter, digital video views surged 56% to 6.7 billion. Notably, WWE Network added more than 60 hours of original content.
Live Events: Revenues from Live Events slid 4% to $30.8 million owing to the timing of international events and fall in ticket revenue at the Royal Rumble event due to lower capacity of the stadium. A total of 99 events (excluding NXT) took place in the quarter and all of them were held in North America. In the prior-year quarter, there were 95 events, of which 91 were held in North America and four in international markets. North American ticket sales fell marginally by 1% to $29.8 million, while international ticket sales fell $1.5 million.
Consumer Product Division: The segment’s revenues came in at $23.5 million, down 33% year over year due to the adoption of ASC Topic 606 that lowered the revenue by $9.7 million. On a comparable basis, excluding the impact of the same, revenues fell 5% owing to the merchandise sales timing associated to WrestleMania Fan Axxess and royalties from the sale of toy products. The company continues its focus on mobile games, which now have more than 70 million installs and an average of more than 800,000 active users on a daily basis.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $105.6 million, long-term debt of $29.8 million and shareholders’ equity of $275.6 million. In the quarter, the company generated negative free cash flow of $1.8 million.
E.W. Scripps Company (SSP - Free Report) , a Zacks Rank #1 company, delivered an average positive earnings surprise of 75.8% in the trailing four quarters.
Tribune Media Company delivered a positive earnings surprise of 62% in the last reported quarter. This Zacks Rank #1 company has a long-term earnings growth rate of 2%.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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World Wrestling (WWE) Q1 Earnings Surpass, Revenues Miss
World Wrestling Entertainment Inc. continued with its positive earnings surprise streak in 2018 as well. This integrated media and entertainment company posted first-quarter adjusted earnings of 18 cents a share that beat the Zacks Consensus Estimate of 13 cents, and surged considerably from 8 cents reported in the year-ago period. Clearly, the company’s effort to focus on increasing original content production, localization and strategic initiatives bode well.
WWE’s revenues of $187.7 million came almost flat with the prior-year quarter but fell short of the Zacks Consensus Estimate of $192 million, after surpassing the same in the preceding five quarters. Adoption of a new FASB standard for revenue recognition, ASC Topic 606, lowered the revenues by $10.3 million. On a comparable basis, excluding the impact of the same, revenues rose by 5%.
Total adjusted OBIDA soared roughly 40% to $35.2 million during the quarter reflecting rise in content rights fees, higher sales of advertising and sponsorships, and sturdy performance across WWE Network.
WWE now envisions second-quarter adjusted OIBDA in the range of $30-$34 million compared with $24.3 million reported in the prior-year quarter. The company now projects full year adjusted OIBDA to be at least $150 million (excluding stock-based compensation expense), up from its prior view of at least $145 million. For the first half of 2018, management expects adjusted OBIDA growth in the band of 32-40%.
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.
These efforts have helped this Zacks Rank #2 (Buy) stock to gain 21.3% in the past three months compared with the industry’s decline of 5.7%.
World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise
World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise | World Wrestling Entertainment, Inc. Quote
Segmental Details
Media Division: Revenues from the Media division rose 10% to $133.4 million principally due to increase in core content rights fees (up 10.6%), comprising license fees from the distribution of flagship programs Raw and SmackDown, and jump in other content, reflecting the debut of Mixed Match Challenge on Facebook Watch. Rise in sales and advertising sponsorship across media platforms (up 29.8%) and sustained growth of WWE Network (up 3.3%) also positively impacted the results.
The number of average paid subscribers increased 5% year over year in the quarter to 1.56 million. Management now envisions average paid subscribers of approximately 1.77 million for the second quarter, reflecting an increase of 8% from the prior-year period. During the quarter, digital video views surged 56% to 6.7 billion. Notably, WWE Network added more than 60 hours of original content.
Live Events: Revenues from Live Events slid 4% to $30.8 million owing to the timing of international events and fall in ticket revenue at the Royal Rumble event due to lower capacity of the stadium. A total of 99 events (excluding NXT) took place in the quarter and all of them were held in North America. In the prior-year quarter, there were 95 events, of which 91 were held in North America and four in international markets. North American ticket sales fell marginally by 1% to $29.8 million, while international ticket sales fell $1.5 million.
Consumer Product Division: The segment’s revenues came in at $23.5 million, down 33% year over year due to the adoption of ASC Topic 606 that lowered the revenue by $9.7 million. On a comparable basis, excluding the impact of the same, revenues fell 5% owing to the merchandise sales timing associated to WrestleMania Fan Axxess and royalties from the sale of toy products. The company continues its focus on mobile games, which now have more than 70 million installs and an average of more than 800,000 active users on a daily basis.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $105.6 million, long-term debt of $29.8 million and shareholders’ equity of $275.6 million. In the quarter, the company generated negative free cash flow of $1.8 million.
Other Key Picks
The New York Times Company (NYT - Free Report) has a long-term earnings growth rate of 13% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
E.W. Scripps Company (SSP - Free Report) , a Zacks Rank #1 company, delivered an average positive earnings surprise of 75.8% in the trailing four quarters.
Tribune Media Company delivered a positive earnings surprise of 62% in the last reported quarter. This Zacks Rank #1 company has a long-term earnings growth rate of 2%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>