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World Wrestling (WWE) Q2 Results: Factors Shaping the Outcome
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World Wrestling Entertainment, Inc. is scheduled to report second-quarter 2018 numbers before the opening bell on Jul 26. In the previous quarter, the company beat the Zacks Consensus Estimate by 38.5%.
The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters by an average of 25%.
Investors are counting on another estimate beat in the to-be-reported quarter. Let’s delve deep and take a look at the determinants of the second-quarter results.
How are Top & Bottom Line Estimates Faring?
After registering a bottom-line increase of 125% in the first quarter of 2018, World Wrestling is likely to record year-over-year growth of 128.6% in the second quarter of 2018 as well. This is quite evident from the Zacks Consensus Estimate for the quarter under review, which stands at 16 cents compared with 7 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate remained stable in the last 30 days. Analysts polled by Zacks now project revenues of $243 million, up from $214.6 million in the year-ago quarter.
World Wrestling Entertainment, Inc. Price and EPS Surprise
World Wrestling is focused on creating new and original content in order to boost revenues in its network unit. In this regard, World Wrestling is undertaking strategies such as execution of customer acquisition and retention programs, increase in distribution platform, introduction of new features and foraying into new locations.
Notably, the company’s multi-year deals with 21st Century Fox-owned Fox Sports and Comcast’s USA Network for its flagship programs Raw and SmackDown Live will drive its top line. Per management, these agreements will improve the average annual value of WWE’s U.S. distribution to 3.6 times of the contract with Comcast’s NBC Universal. Further, management stated that these agreements will likely bump up revenues from $311 million in 2019 to $462 million in 2021.
With the launch of Greatest Royal Rumble event in Saudi Arabia, the company’s 10-year partnership with Kingdom is likely to contribute significantly to the company’s overall revenues and adjusted OIBDA, going forward. This led the management to project 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 expects 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 anticipates adjusted OBIDA growth in the band of 32-40%.
Apart from these, the company had earlier stated that the distribution agreement, which generated a large chunk of television rights revenues, will expire in 2019 in some regions. The company is looking to renew the distribution agreement in the United Kingdom by the end of 2018 and in India by the first half of 2019. The company believes that it will continue to add more WWE Network subscribers. 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. Core content rights fees jumped 10.6% during the quarter under review.
What the Zacks Model Unveils
Our proven model shows that World Wrestling Entertainment is likely to beat estimates this quarter. A stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen.
World Wrestling Entertainment has a Zacks Rank #2 with an Earnings ESP of +7.94%, which indicates a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
E.W.Scripps Company (SSP - Free Report) has an Earnings ESP of +8% and a Zacks Rank #3.
Viacom has an Earnings ESP of +0.28% and a Zacks Rank of #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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World Wrestling (WWE) Q2 Results: Factors Shaping the Outcome
World Wrestling Entertainment, Inc. is scheduled to report second-quarter 2018 numbers before the opening bell on Jul 26. In the previous quarter, the company beat the Zacks Consensus Estimate by 38.5%.
The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters by an average of 25%.
Investors are counting on another estimate beat in the to-be-reported quarter. Let’s delve deep and take a look at the determinants of the second-quarter results.
How are Top & Bottom Line Estimates Faring?
After registering a bottom-line increase of 125% in the first quarter of 2018, World Wrestling is likely to record year-over-year growth of 128.6% in the second quarter of 2018 as well. This is quite evident from the Zacks Consensus Estimate for the quarter under review, which stands at 16 cents compared with 7 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate remained stable in the last 30 days. Analysts polled by Zacks now project revenues of $243 million, up from $214.6 million in the year-ago quarter.
World Wrestling Entertainment, Inc. Price and EPS Surprise
World Wrestling Entertainment, Inc. Price and EPS Surprise | World Wrestling Entertainment, Inc. Quote
Driving Factors
World Wrestling is focused on creating new and original content in order to boost revenues in its network unit. In this regard, World Wrestling is undertaking strategies such as execution of customer acquisition and retention programs, increase in distribution platform, introduction of new features and foraying into new locations.
Notably, the company’s multi-year deals with 21st Century Fox-owned Fox Sports and Comcast’s USA Network for its flagship programs Raw and SmackDown Live will drive its top line. Per management, these agreements will improve the average annual value of WWE’s U.S. distribution to 3.6 times of the contract with Comcast’s NBC Universal. Further, management stated that these agreements will likely bump up revenues from $311 million in 2019 to $462 million in 2021.
With the launch of Greatest Royal Rumble event in Saudi Arabia, the company’s 10-year partnership with Kingdom is likely to contribute significantly to the company’s overall revenues and adjusted OIBDA, going forward. This led the management to project 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 expects 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 anticipates adjusted OBIDA growth in the band of 32-40%.
Apart from these, the company had earlier stated that the distribution agreement, which generated a large chunk of television rights revenues, will expire in 2019 in some regions. The company is looking to renew the distribution agreement in the United Kingdom by the end of 2018 and in India by the first half of 2019. The company believes that it will continue to add more WWE Network subscribers. 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. Core content rights fees jumped 10.6% during the quarter under review.
What the Zacks Model Unveils
Our proven model shows that World Wrestling Entertainment is likely to beat estimates this quarter. A stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen.
World Wrestling Entertainment has a Zacks Rank #2 with an Earnings ESP of +7.94%, which indicates a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
IMAX Corporation (IMAX - Free Report) has an Earnings ESP of +1.65% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
E.W.Scripps Company (SSP - Free Report) has an Earnings ESP of +8% and a Zacks Rank #3.
Viacom has an Earnings ESP of +0.28% and a Zacks Rank of #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>