World Wrestling Entertainment, Inc. (NYSE: WWE) investors got more good news on Thursday when the company reported better-than-expected revenue numbers and raised its full-year guidance following a pair of game-changing new TV contracts in the second quarter. Even with WWE stock up 287 percent in the past year, analysts still see plenty of reasons for long-term investors to like the stock.
WWE reported second-quarter diluted earnings per share of 11 cents, missing consensus estimates of 16 cents. However, revenue of $281.6 million was up 31 percent from a year ago and far exceeded analyst expectations of $239.5 million.
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In addition, the WWE Network paid subscriber count was up 10 percent in the quarter to 1.8 million, in-line with the company’s previous guidance. WWE also reported a 58 percent increase in digital video views compared to a year ago. Digital content hours consumed rose 71 percent to 509 million hours.
Adjusted operating income before depreciation and amortization was up 79 percent on a comparable basis to $43.5 million.
WWE stock has been on fire of late thanks to two new TV deals with Comcast Corp. ( CMCSA) subsidiary NBCUniversal and Twenty-First Century Fox ( FOXA). The new TV deals represent a combined average annual value of 3.6 times the value of WWE’s previous TV deal for “Monday Night Raw” and “SmackDown Live.”
“We’re pleased with our continued success in increasing the monetization of WWE content globally,” CEO Vince McMahon says in a statement.
Looking ahead, WWE once again raised its guidance for full-year adjusted OIBDA from $150 million to a new range of between $160 million and $170 million. The company also says it expects an average paid WWE Network subscriber count of 1.67 million in the third quarter. WWE projects adjusted OIBDA of between $30 million and $34 million in the third quarter and “meaningful revenue growth” in the fourth quarter of 2018.
Morgan Stanley analyst Benjamin Swinburne says the new TV deals set the stage for major long-term earnings and free cash flow growth for WWE.
“While we await the outcomes of its smaller U.K. and India rights renewals, to some extent the match is over as WWE is likely the fastest growing earnings story in our coverage group,” Swinburne says.
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Morgan Stanley has an “overweight” rating and $100 price target for WWE stock.
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World Wrestling Entertainment, Inc. (WWE) Stock Rises on Blowout Quarter originally appeared on usnews.com
