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World Wrestling (WWE) Q4 Earnings Top Estimates, Revenues Up
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World Wrestling Entertainment, Inc. posted fourth-quarter 2021 results, with the bottom line increasing year over year and beating the Zacks Consensus Estimate. The top line missed the consensus mark but increased year over year. The quarterly performance gained from return of fans to live events. Solid growth across its business segments on the back of wider audience engagement driven by distribution on new digital platforms like Peacock was a driver.
Management expects to generate record revenues in 2022, owing to ticketed live events, staging of additional large-scale international events, higher rights fees for flagship programs along with monetization of new series. That said, it anticipates witnessing a spike in the expense base, courtesy of an increased activity level in 2022.
Let’s Delve Deeper.
World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise
This Stamford, CT-based company reported fourth-quarter adjusted earnings of 70 cents a share, surpassing the Zacks Consensus Estimate of 46 cents. The quarterly earnings exhibited a significant rise from 24 cents a share reported in the prior-year quarter.
WWE’s revenues of $310.3 million missed the Zacks Consensus Estimate of $319.3 million. The top line rose 30% year over year, mainly driven by the large-scale international event —Crown Jewel. Higher ticket and venue merchandise sales stemming from the return to ticketed live events, which started in July 2021, also contributed to the top line.
A Look Into Margins
The company’s operating income came in at $83.6 million, up 131% year on year, reflecting the positive impact of the company’s large-scale event. The return to other ticketed live events also drove the metric. This was somewhat offset by escalated management incentive compensation costs related to higher operating performance.
The company’s operating income margin came in at 27%, up from 15% reported in the year-ago quarter.
Adjusted OIBDA came in at $97.2 million, up 90% year on year, owing to growth in revenues. This was somewhat offset by higher management incentive compensation. Adjusted OIBDA margin expanded to 31% from 21% reported in the prior-year quarter. We note that the company measures adjusted OIBDA as operating income, excluding depreciation and amortization, stock-based compensation, certain impairment charges and other non-recurring material items.
Segmental Details
Media Division: Revenues in the Media division went up 22% to $257.6 million, mainly owing to the impact of a large-scale international event. The contractual escalation of domestic core content rights fees for its flagship programs, including Raw and SmackDown, drove segmental revenues. However, lower network revenue was a drag on the metric.
Revenues from core content rights fees increased to $153 million from $139.8 million reported in the year-ago quarter. Network revenues (including pay-per-view) were down to $31.4 million from $45 million reported in the year-ago quarter. Advertising and sponsorship revenues went up to $21.1 million from $16.5 million posted in the year-ago quarter. Other media revenues increased to $52.1 million from $9.2 million.
Live Events: Revenues from Live Events came in at $20.1 million, up from $0.7 million reported in the year-ago quarter. The upside resulted from higher ticket sales as the company returned to staging live ticketed events. It held 57 ticketed live events in the reported quarter, consisting of 48 events in North America and nine events in the international markets.
Consumer Products Division: The segment’s revenues were $32.6 million, up 21% year on year. The segment gained from its franchise video game. Also, increased sales of merchandise at live event venues thanks to the return to ticketed live events were an upside. These were somewhat offset by lower e-commerce merchandise sales.
Image Source: Zacks Investment Research
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $134.8 million, net short-term investments of $281 million, long-term debt of $21.3 million and stockholders’ equity of $381.3 million.
Cash flow generated from operating activities during the quarter amounted to $42.3 million, while free cash flow was $27.5 million. For 2021, cash flow generated from operating activities amounted to $178.6 million.
The company paid out $59 million to shareholders during fourth-quarter 2021. This includes $50 million in share repurchases as well as $9 million in dividends paid. The company has approximately $1 million shares remaining under its existing share repurchase program.
For 2021, the company incurred capital expenditures of $39 million. For full-year 2022, capital expenditures are expected in a range of $280-$310 million.
Outlook
For 2022, the company projects adjusted OIBDA in the range of $360-$375 million, reflecting 10-15% year-over-year growth. The upside is likely to be driven by revenue growth, offset by higher production, content-related and other expenses.
The Zacks Rank #3 (Hold) company anticipates first-quarter 2022 adjusted OIBDA in the range of $90-$100 million, reflecting a 7-19% year-over-year growth. The projected growth takes into account the impact of staging one large-scale international event, which the company was unable to execute a year ago. The company’s return to live event touring, which began in July 2021, is likely to contribute to the upside. Such upsides are likely to be somewhat countered by the absence of the one-time revenue recognition related to Peacock. Higher operating expenses, including escalated production and related costs as well as other activity-based expenses, are expected to be a drag.
The company’s stock has decreased 18.5% in the past three months compared with the industry’s decline of 11.8%.
Cirrus Logic, a leader in low-power, high-precision mixed-signal processing solutions, sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 16%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cirrus Logic’s current financial year sales and earnings per share (EPS) suggests growth of 25% and 37.8%, respectively, from the year-ago period. CRUS has an expected EPS growth rate of 10% for three-five years.
Fox Corporation, which operates as a news, sports, and entertainment company, carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 81.1%, on average.
The Zacks Consensus Estimate for Fox Corporation’s current financial year revenues suggests growth of 6.1% from the year-ago period. FOXA has an expected EPS growth rate of 8.8% for three-five years.
Vontier Corporation, a global industrial technology company focused on transportation and mobility solutions, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 10.3%, on average.
The Zacks Consensus Estimate for Vontier Corporation’s current financial year sales and EPS suggests growth of 11.4% and 15.4%, respectively, from the year-ago period. VNT has an expected EPS growth rate of 6.8% for three-five years.
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World Wrestling (WWE) Q4 Earnings Top Estimates, Revenues Up
World Wrestling Entertainment, Inc. posted fourth-quarter 2021 results, with the bottom line increasing year over year and beating the Zacks Consensus Estimate. The top line missed the consensus mark but increased year over year. The quarterly performance gained from return of fans to live events. Solid growth across its business segments on the back of wider audience engagement driven by distribution on new digital platforms like Peacock was a driver.
Management expects to generate record revenues in 2022, owing to ticketed live events, staging of additional large-scale international events, higher rights fees for flagship programs along with monetization of new series. That said, it anticipates witnessing a spike in the expense base, courtesy of an increased activity level in 2022.
Let’s Delve Deeper.
World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise
World Wrestling Entertainment, Inc. price-consensus-eps-surprise-chart | World Wrestling Entertainment, Inc. Quote
Q4 Performance Insights
This Stamford, CT-based company reported fourth-quarter adjusted earnings of 70 cents a share, surpassing the Zacks Consensus Estimate of 46 cents. The quarterly earnings exhibited a significant rise from 24 cents a share reported in the prior-year quarter.
WWE’s revenues of $310.3 million missed the Zacks Consensus Estimate of $319.3 million. The top line rose 30% year over year, mainly driven by the large-scale international event —Crown Jewel. Higher ticket and venue merchandise sales stemming from the return to ticketed live events, which started in July 2021, also contributed to the top line.
A Look Into Margins
The company’s operating income came in at $83.6 million, up 131% year on year, reflecting the positive impact of the company’s large-scale event. The return to other ticketed live events also drove the metric. This was somewhat offset by escalated management incentive compensation costs related to higher operating performance.
The company’s operating income margin came in at 27%, up from 15% reported in the year-ago quarter.
Adjusted OIBDA came in at $97.2 million, up 90% year on year, owing to growth in revenues. This was somewhat offset by higher management incentive compensation. Adjusted OIBDA margin expanded to 31% from 21% reported in the prior-year quarter. We note that the company measures adjusted OIBDA as operating income, excluding depreciation and amortization, stock-based compensation, certain impairment charges and other non-recurring material items.
Segmental Details
Media Division: Revenues in the Media division went up 22% to $257.6 million, mainly owing to the impact of a large-scale international event. The contractual escalation of domestic core content rights fees for its flagship programs, including Raw and SmackDown, drove segmental revenues. However, lower network revenue was a drag on the metric.
Revenues from core content rights fees increased to $153 million from $139.8 million reported in the year-ago quarter. Network revenues (including pay-per-view) were down to $31.4 million from $45 million reported in the year-ago quarter. Advertising and sponsorship revenues went up to $21.1 million from $16.5 million posted in the year-ago quarter. Other media revenues increased to $52.1 million from $9.2 million.
Live Events: Revenues from Live Events came in at $20.1 million, up from $0.7 million reported in the year-ago quarter. The upside resulted from higher ticket sales as the company returned to staging live ticketed events. It held 57 ticketed live events in the reported quarter, consisting of 48 events in North America and nine events in the international markets.
Consumer Products Division: The segment’s revenues were $32.6 million, up 21% year on year. The segment gained from its franchise video game. Also, increased sales of merchandise at live event venues thanks to the return to ticketed live events were an upside. These were somewhat offset by lower e-commerce merchandise sales.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $134.8 million, net short-term investments of $281 million, long-term debt of $21.3 million and stockholders’ equity of $381.3 million.
Cash flow generated from operating activities during the quarter amounted to $42.3 million, while free cash flow was $27.5 million. For 2021, cash flow generated from operating activities amounted to $178.6 million.
The company paid out $59 million to shareholders during fourth-quarter 2021. This includes $50 million in share repurchases as well as $9 million in dividends paid. The company has approximately $1 million shares remaining under its existing share repurchase program.
For 2021, the company incurred capital expenditures of $39 million. For full-year 2022, capital expenditures are expected in a range of $280-$310 million.
Outlook
For 2022, the company projects adjusted OIBDA in the range of $360-$375 million, reflecting 10-15% year-over-year growth. The upside is likely to be driven by revenue growth, offset by higher production, content-related and other expenses.
The Zacks Rank #3 (Hold) company anticipates first-quarter 2022 adjusted OIBDA in the range of $90-$100 million, reflecting a 7-19% year-over-year growth. The projected growth takes into account the impact of staging one large-scale international event, which the company was unable to execute a year ago. The company’s return to live event touring, which began in July 2021, is likely to contribute to the upside. Such upsides are likely to be somewhat countered by the absence of the one-time revenue recognition related to Peacock. Higher operating expenses, including escalated production and related costs as well as other activity-based expenses, are expected to be a drag.
The company’s stock has decreased 18.5% in the past three months compared with the industry’s decline of 11.8%.
Stocks to Consider
Here are three more favorably ranked stocks — Cirrus Logic (CRUS - Free Report) , Fox Corporation (FOXA - Free Report) and Vontier Corporation (VNT - Free Report) .
Cirrus Logic, a leader in low-power, high-precision mixed-signal processing solutions, sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 16%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cirrus Logic’s current financial year sales and earnings per share (EPS) suggests growth of 25% and 37.8%, respectively, from the year-ago period. CRUS has an expected EPS growth rate of 10% for three-five years.
Fox Corporation, which operates as a news, sports, and entertainment company, carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 81.1%, on average.
The Zacks Consensus Estimate for Fox Corporation’s current financial year revenues suggests growth of 6.1% from the year-ago period. FOXA has an expected EPS growth rate of 8.8% for three-five years.
Vontier Corporation, a global industrial technology company focused on transportation and mobility solutions, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 10.3%, on average.
The Zacks Consensus Estimate for Vontier Corporation’s current financial year sales and EPS suggests growth of 11.4% and 15.4%, respectively, from the year-ago period. VNT has an expected EPS growth rate of 6.8% for three-five years.