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Things to Know Ahead of World Wrestling's (WWE) Q2 Earnings

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World Wrestling Entertainment, Inc. is scheduled to report second-quarter 2019 numbers on Jul 25, before the opening bell. We note that in the trailing four quarters, the company’s bottom line has underperformed the Zacks Consensus Estimate, recording average negative earnings surprise of 89.6%. In the last reported quarter, the company missed the consensus mark by a wide margin.

The Zacks Consensus Estimate for the second quarter is pegged at a loss of 3 cents, indicating a significant decline from earnings of 14 cents reported in the year-ago quarter. The consensus mark has remained stable over the past 30 days.

The consensus mark for revenues is pegged at $277.2 million, suggesting a decline of 1.6% from the year-ago quarter’s figure.

World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise

 

 

Headwinds for Q2

WWE witnessed dismal first-quarter 2019 results and a somewhat similar picture is likely to emerge in the second quarter as well. This is quite evident from the aforementioned Zacks Consensus Estimates.

We note that the total adjusted OIBDA for the first quarter of 2019 came in at $12.4 million, mirroring a sharp decline from adjusted OIBDA of $35.2 million reported in the year-ago quarter. For second-quarter 2019, the company anticipates adjusted OIBDA in the band of $19-$24 million, down significantly from $43.5 million reported in the year-ago period.

Moreover, possibilities of lower ticket sales during live events or drop in the number of live events as well as an uptick in costs at WWE Network pose concerns. Further, analysts pointed that any increase in operating expenses, marketing and selling expenses, and general and administrative expenses may hurt the company’s bottom line in the impending quarter.

Tailwinds for Q2

WWE is focused on increasing original content, subscriber growth, rising TV rights fees and monetization of video content across digital as well as direct-to-consumer platforms. Also, the company has been implementing strategies including the execution of customer acquisition and retention programs, increase in distribution platform, introduction of new features and foraying into new regions. These efforts are expected to cushion its performance in the upcoming quarterly announcement.

What Our Model Says

Our proven model does not conclusively show that World Wrestling is likely to beat bottom-line estimates this quarter. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

World Wrestling’s Earnings ESP of 0.00% combined with its Zacks Rank #5 (Strong Sell) makes us apprehensive about an earnings beat. Markedly, we caution against sell-rated stocks (Zacks Rank #4 or 5) going into earnings announcement.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post earnings beat.

IMAX Corporation (IMAX - Free Report) has an Earnings ESP of +0.35% and a Zacks Rank #3.

Charter Communications, Inc. (CHTR - Free Report) has an Earnings ESP of +2.14% and a Zacks Rank #3.

DISH Network Corporation has an Earnings ESP of +0.92% and a Zacks Rank #3.

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