Categories Earnings, Leisure & Entertainment

WWE reports Q2 earnings beat, reaffirms sales outlook

World Wrestling Entertainment (NYSE: WWE) increased 3% today after the second quarter earnings surpassed estimates. However, revenue fell short of expectations. The company’s stock has dwindled 30% since April post the disappointing first quarter results. It also maintained its full-year sales outlook of $1 billion, in line with street estimates.

The company reported 5% drop in revenues of $268.9 million due to lower revenues from all its segments. Analysts were expecting top line to come in at $275 million.

However, earnings came in at 11 cents per share, surpassing 4 cents projected by the street. Improvement in EPS was primarily due to lower tax expenses and a cut back on losses from equity investments.

Operating margins fell 2% due to lower revenues and surge in investments. Adjusted OIBDA margins contracted 2% but came in ahead of the guidance, mainly due to improved revenues from the event conducted in Saudi Arabia.

Engagement Metrics Trend

The company’s engagement metrics continues to disappoint. TV ratings for its Raw and SmackDown fell 14% and 11% respectively. Digital content consumption improved 22% over last year, but fell 1% from the prior quarter. Live event attendance fell 2% due to reduced ticket sales impacted by the less number of events conducted in the quarter.

However, WWE is bullish on improving the engagement by bringing back the Superstars for the new season. In addition, the company plans to debut on Fox in October with SmackDown Live. This is expected to garner more visibility and improved viewership in the near future.

OTT Performance

WWE Network offers streaming service direct to its consumers following the freemium model. The declining trend of paid subscribers is a worrying trend for investors and this would be watched closely in the latter half of the year.

At the end of Q2 period, the streaming service saw 6% reduction in paid subscribers. However, for the third quarter, this number is further expected to decline by 8% to 1.53 million over prior year period.

In order to address the declining user base, WWE has shifted the OTT service to a new platform which would result in improved user experience. It also has improved the content localization supporting more languages and offers more proprietary content to the users.

Looking Ahead

For the Q3 period, WWE is projecting adjusted OIBDA to be between $17-22 million. Analysts are expecting revenue of $214.66 million, 14% jump from the prior year. Adjusted EPS is projected to decrease to 15 cents compared to 37 cents last year.

On the fiscal guidance front, the company expects sales to be about $1 billion and adjusted OIBDA around $200 million. However, it has cautioned investors that there could be an impact of $10-20 million to the fiscal outlook considering the headwinds in the rest of the year.

We’re on Apple News! Follow us to receive the latest stock market, earnings, and financial news at your fingertips

Most Popular

What to look for when CVS Health (CVS) reports Q3 earnings

Healthcare company CVS Health Corporation (NYSE: CVS) is all set to report earnings next week, with Wall Street expecting a mixed outcome. The company has been facing challenges in certain

eBay (EBAY): A few factors that helped drive growth in Q3 2024

Shares of eBay Inc. (NASDAQ: EBAY) stayed green on Friday. The stock has gained 32% year-to-date. The ecommerce leader delivered revenue and earnings growth for the third quarter of 2024,

CVX Earnings: Chevron reports lower revenue and profit for Q3 2024

Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top