World Wrestling Entertainment, Inc. (NYSE: WWE) stock is up nearly 80 percent in the past year, but a mixed first quarter had some investors tapping out on Thursday morning. WWE reported first-quarter earnings that beat consensus expectations, but its revenue declined from a year ago.
WWE reported first-quarter adjusted earnings per share of 18 cents, ahead of consensus estimates of 13 cents. Revenue of $187.7 million came up short of Wall Street expectations of $194.3 million and was down slightly from a year ago.
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In addition, WWE reported 1.56 million paid network subscribers, up 5 percent and ahead of its previous guidance of 1.53 million. WWE also reported a 56 percent increase in digital video views compared to a year ago.
Adjusted operating income before depreciation and amortization was up 68 percent on a comparable basis to $42.4 million.
April’s WrestleMania event was watched in 2.12 million global households on the WWE Network. Subscribers watched a total of 25.2 million hours of content on the network over WrestleMania weekend, up 12 percent from last year’s event. WWE content had a record of more than 50 million YouTube views on April 9.
“We’re pleased with our continued success in creating and monetizing our content as evidenced by another record-breaking WrestleMania, which set new highs for network subscribers and viewership,” CEO Vince McMahon says in a statement.
Looking ahead, WWE raised its guidance for full-year adjusted OIBDA from $145 million to $150 million. The company also said it expects an average paid WWE Network subscriber count of 1.77 million in the second quarter. WWE projects adjusted OIBDA of between $30 million and $34 million and a “meaningful increase” in revenue in the second quarter.
Analysts say upcoming TV rights negotiations will be the most important part of the long-term WWE bull story in 2018.
CFRA analyst Tuna Amobi says WWE has a tremendous opportunity in international markets as well.
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“Pursuant to an ongoing multi-year direct-to-consumer transformation strategy, we see a continued focus on video monetization on TV and digital platforms (including its rapidly growing streaming channel),” Amobi says.
CFRA has a “hold” rating and $35 price target for WWE stock.
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World Wrestling Entertainment, Inc. (WWE) Stock Is Getting Slammed originally appeared on usnews.com
