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Factors to Know Ahead of World Wrestling's (WWE) Q3 Earnings

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World Wrestling Entertainment, Inc. is scheduled to report third-quarter 2019 numbers on Oct 31, before the opening bell. We note that in the trailing four quarters, the company’s bottom line has outperformed the Zacks Consensus Estimate, recording average positive earnings surprise of 30.2%. In the last reported quarter, the company surpassed the consensus mark by a wide margin.

What to Expect This Time

The Zacks Consensus Estimate for third-quarter bottom line is pegged at a loss of 1 cent, indicating a significant decline from earnings of 35 cents reported in the year-ago quarter. The consensus mark has remained unchanged over the past 30 days.

For revenues, the consensus mark is pegged at $187.7 million, suggesting a decline of 0.4% from the figure reported in the year-ago quarter.

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

 

Factors at Play

World Wrestling is witnessing softness in adjusted OIBDA for a while now, a trend which is most likely to have sustained in the to-be-reported quarter. In the last earnings call, the company projected adjusted OIBDA decline for the third quarter due to higher fixed costs and lower WWE Network revenues, which offsets higher content right fees. Management expects adjusted OIBDA in the band of $17-$22 million for the quarter, which is significantly down from $35.8 million reported in the year-ago period. Evidently, this is likely to have impacted the company’s bottom line.

Of late, the company has been struggling with its subscriber base. Management expects average paid subscribers of approximately 1.53 million for the third quarter, which indicates a decline of 8% from the year-ago period. Apart from this, fall in ticket sales during live events or drop in the number of live events remains concern.

Nevertheless, WWE’s focus on expanding original content, raising content rights fees and monetization of video content across digital as well as direct-to-consumer platforms is likely to have reflected in the top line. Also, strategies such as the development of fresh content, execution of customer acquisition and retention programs, introduction of features and foray into new regions bode well.

Zacks Model

Our proven model does not conclusively predict an earnings beat for World Wrestling this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although World Wrestling carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are a few companies you may want to consider, as our model shows that these have the right combination to post an earnings beat:

Cable One, Inc. (CABO - Free Report) has an Earnings ESP of +4.10% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Viacom Inc. has an Earnings ESP of +0.22% and a Zacks Rank #3.

Wayfair Inc. (W - Free Report) has an Earnings ESP of +0.36% and a Zacks Rank #3.

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