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World Wrestling (WWE) Q3 Earnings Beat, Revenues Rise Y/Y
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World Wrestling Entertainment, Inc. posted third-quarter 2022 results, wherein the top and bottom lines not only beat the Zacks Consensus Estimate but also increased year over year. The upbeat performance can be attributed to growth in the Media segment and a shift in the timing of revenues related to certain licensing agreements.
Premium live events, such as Money in the Bank, SummerSlam and Extreme Rules, witnessed remarkable viewership. Clash at the Castle also witnessed stellar viewership. These events, coupled with solid ratings for flagship programs, Raw and SmackDown, continued to expand the brand reach and enhance the content value.
WWE also announced a multi-year deal with its long-standing partner, the Foxtel Group, to expand content distribution in Australia. It also announced the creation of NXT Europe, which is slated to be launched next year, to expand the NXT brand internationally.
Q3 Performance Insight
This Stamford, CT-based company reported third-quarter 2022 adjusted earnings of 65 cents a share, which surpassed the Zacks Consensus Estimate of 50 cents. The quarterly earnings increased significantly from the 52 cents a share reported in the prior-year quarter.
WWE’s revenues of $304.6 million came ahead of the consensus estimate of $285.7 million and surged 19% year over year, driven primarily by a jump in core content rights fees for flagship programs and the monetization of third-party original programming. Higher consumer product licensing revenues and international ticket sales also contributed to the top line.
World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise
WWE’s operating income of $58.9 million declined 8% year over year due to higher operating expenses on account of costs associated with the creation of content and expenses related to the Special Committee investigation. We note that the operating income margin contracted to 19% from 25% in the year-ago quarter. However, the adjusted operating income came in at $76.6 million, up from $64 million in the prior-year quarter.
Adjusted OIBDA came in at $91.2 million, up 17% year over year. The adjusted OIBDA margin remained flat at 30%.
Management foresees fourth-quarter adjusted OIBDA between $83 million and $90 million compared with $94.2 million reported in the year-ago period. The guidance indicates revenue growth, driven by an expected increase in media rights fees for premium live events as well as an expected increase in the monetization of third-party original programming and revenues from the staging of a large-scale international event. Management expects higher operating expenses in the final quarter.
Considering the stellar performance in the first nine months of the financial year, management now expects 2022 adjusted OIBDA to be at the upper end of the earlier projected range of $370-$385 million. The upbeat guidance suggests a full live event touring schedule, including large-scale international events, and the increased monetization of third-party original programming. It anticipates higher content-related expenses. WWE reported adjusted OIBDA of $324.1 million in 2021.
Segment Details
Media Division: Revenues in the Media division went up 15% to $233 million. The year-over-year increase can be attributed to a jump in domestic and international media rights fees associated with flagship programs. The increase was also related to the delivery of third-party original programming.
Core content rights fees increased to $156.7 million from $141.3 million in the prior-year period. Network revenues came in at $46.5 million, up from the $43.1 million reported in the year-ago quarter.
Meanwhile, advertising and sponsorship revenues declined to $13.2 million from $16.1 million in the year-ago period. Other media revenues jumped to $16.6 million from $2.2 million in the prior-year period.
Live Events: Revenues from Live Events came in at $35.2 million, up meaningfully from $28 million in the year-ago quarter. The upside can be attributed to an increase in international ticket sales from a major stadium event, Clash at the Castle.
The company held 58 ticketed live events in the reported quarter consisting of 57 events in North America and one in international markets. The average attendance at the North American events was roughly 6,300. North American ticket sales increased to $24.1 million from $23.8 million in the year-ago period. International ticket sales jumped to $8 million from $2.4 million in the prior-year quarter.
Consumer Products Division: The segment’s revenues of $36.4 million increased 45% year over year. We note that consumer product licensing revenues came in at $22.6 million, up from $11.6 million in the year-ago period.
Meanwhile, e-commerce merchandise sales declined to $7.6 million from $8.2 million in the prior-year period. Venue merchandise sales jumped to $6.2 million from $5.3 million in the year-ago quarter.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $181.7 million, net short-term investments of $259.3 million, long-term debt of $21 million and stockholders’ equity of $471.3 million.
Cash flow generated from operating activities during the quarter amounted to $54.5 million, while free cash flow was $3.5 million.
The company paid out $9.1 million to shareholders in dividends in the third quarter. The company did not repurchase any shares during the quarter. As of Sep 30, 2022, the company had approximately $210.9 million remaining under its share repurchase authorization of $500 million.
Tapestry, a provider of luxury accessories and branded lifestyle products, carries a Zacks Rank #2 (Buy). TPR has an expected EPS growth rate of 12.5% for three to five years.
The Zacks Consensus Estimate for Tapestry’s current financial-year sales and EPS suggests growth of 3.5% and 11%, respectively, from the year-ago period. TPR has a trailing four-quarter earnings surprise of 14.5%, on average.
Home Depot, which operates as a home improvement retailer, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 11.2%.
The Zacks Consensus Estimate for Home Depot’s current financial-year revenues and EPS suggests growth of 3.6% and 7.2%, respectively, from the year-ago reported figure. HD has a trailing four-quarter earnings surprise of 7.2%, on average.
Kroger, one of the leading grocery retailers, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 11.7%.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 7.8% and 10.3%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 15.7%, on average.
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World Wrestling (WWE) Q3 Earnings Beat, Revenues Rise Y/Y
World Wrestling Entertainment, Inc. posted third-quarter 2022 results, wherein the top and bottom lines not only beat the Zacks Consensus Estimate but also increased year over year. The upbeat performance can be attributed to growth in the Media segment and a shift in the timing of revenues related to certain licensing agreements.
Premium live events, such as Money in the Bank, SummerSlam and Extreme Rules, witnessed remarkable viewership. Clash at the Castle also witnessed stellar viewership. These events, coupled with solid ratings for flagship programs, Raw and SmackDown, continued to expand the brand reach and enhance the content value.
WWE also announced a multi-year deal with its long-standing partner, the Foxtel Group, to expand content distribution in Australia. It also announced the creation of NXT Europe, which is slated to be launched next year, to expand the NXT brand internationally.
Q3 Performance Insight
This Stamford, CT-based company reported third-quarter 2022 adjusted earnings of 65 cents a share, which surpassed the Zacks Consensus Estimate of 50 cents. The quarterly earnings increased significantly from the 52 cents a share reported in the prior-year quarter.
WWE’s revenues of $304.6 million came ahead of the consensus estimate of $285.7 million and surged 19% year over year, driven primarily by a jump in core content rights fees for flagship programs and the monetization of third-party original programming. Higher consumer product licensing revenues and international ticket sales also contributed to the top line.
World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise
World Wrestling Entertainment, Inc. price-consensus-eps-surprise-chart | World Wrestling Entertainment, Inc. Quote
A Look at Margins
WWE’s operating income of $58.9 million declined 8% year over year due to higher operating expenses on account of costs associated with the creation of content and expenses related to the Special Committee investigation. We note that the operating income margin contracted to 19% from 25% in the year-ago quarter. However, the adjusted operating income came in at $76.6 million, up from $64 million in the prior-year quarter.
Adjusted OIBDA came in at $91.2 million, up 17% year over year. The adjusted OIBDA margin remained flat at 30%.
Management foresees fourth-quarter adjusted OIBDA between $83 million and $90 million compared with $94.2 million reported in the year-ago period. The guidance indicates revenue growth, driven by an expected increase in media rights fees for premium live events as well as an expected increase in the monetization of third-party original programming and revenues from the staging of a large-scale international event. Management expects higher operating expenses in the final quarter.
Considering the stellar performance in the first nine months of the financial year, management now expects 2022 adjusted OIBDA to be at the upper end of the earlier projected range of $370-$385 million. The upbeat guidance suggests a full live event touring schedule, including large-scale international events, and the increased monetization of third-party original programming. It anticipates higher content-related expenses. WWE reported adjusted OIBDA of $324.1 million in 2021.
Segment Details
Media Division: Revenues in the Media division went up 15% to $233 million. The year-over-year increase can be attributed to a jump in domestic and international media rights fees associated with flagship programs. The increase was also related to the delivery of third-party original programming.
Core content rights fees increased to $156.7 million from $141.3 million in the prior-year period. Network revenues came in at $46.5 million, up from the $43.1 million reported in the year-ago quarter.
Meanwhile, advertising and sponsorship revenues declined to $13.2 million from $16.1 million in the year-ago period. Other media revenues jumped to $16.6 million from $2.2 million in the prior-year period.
Live Events: Revenues from Live Events came in at $35.2 million, up meaningfully from $28 million in the year-ago quarter. The upside can be attributed to an increase in international ticket sales from a major stadium event, Clash at the Castle.
The company held 58 ticketed live events in the reported quarter consisting of 57 events in North America and one in international markets. The average attendance at the North American events was roughly 6,300. North American ticket sales increased to $24.1 million from $23.8 million in the year-ago period. International ticket sales jumped to $8 million from $2.4 million in the prior-year quarter.
Consumer Products Division: The segment’s revenues of $36.4 million increased 45% year over year. We note that consumer product licensing revenues came in at $22.6 million, up from $11.6 million in the year-ago period.
Meanwhile, e-commerce merchandise sales declined to $7.6 million from $8.2 million in the prior-year period. Venue merchandise sales jumped to $6.2 million from $5.3 million in the year-ago quarter.
Other Financial Details
WWE ended the quarter with cash and cash equivalents of $181.7 million, net short-term investments of $259.3 million, long-term debt of $21 million and stockholders’ equity of $471.3 million.
Cash flow generated from operating activities during the quarter amounted to $54.5 million, while free cash flow was $3.5 million.
The company paid out $9.1 million to shareholders in dividends in the third quarter. The company did not repurchase any shares during the quarter. As of Sep 30, 2022, the company had approximately $210.9 million remaining under its share repurchase authorization of $500 million.
This Zacks Rank #1 (Strong Buy) stock has risen 8.8% in the past three months against the industry’s decline of 12.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Hot Stocks
Here we have highlighted three more top-ranked stocks, namely Tapestry (TPR - Free Report) , Home Depot (HD - Free Report) and Kroger (KR - Free Report) .
Tapestry, a provider of luxury accessories and branded lifestyle products, carries a Zacks Rank #2 (Buy). TPR has an expected EPS growth rate of 12.5% for three to five years.
The Zacks Consensus Estimate for Tapestry’s current financial-year sales and EPS suggests growth of 3.5% and 11%, respectively, from the year-ago period. TPR has a trailing four-quarter earnings surprise of 14.5%, on average.
Home Depot, which operates as a home improvement retailer, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 11.2%.
The Zacks Consensus Estimate for Home Depot’s current financial-year revenues and EPS suggests growth of 3.6% and 7.2%, respectively, from the year-ago reported figure. HD has a trailing four-quarter earnings surprise of 7.2%, on average.
Kroger, one of the leading grocery retailers, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 11.7%.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 7.8% and 10.3%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 15.7%, on average.