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How World Wrestling (WWE) Looks Just Ahead of Q1 Earnings
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World Wrestling Entertainment, Inc. is scheduled to report first-quarter 2018 numbers before the opening bell on May 3. In the previous quarter, the company beat the Zacks Consensus Estimate by 5%.
The company’s earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters by an average of 8.6%.
Investors are counting on another estimate beat in the to-be-reported quarter. Let’s delve deepand take a look at the determinants of the first-quarter results.
Factors Influencing Results
Per management, WWE Network attracted an average of roughly 1.56 million paid subscribers in the first quarter of 2018. This reflects an increase of 5% from the year-ago figure. The company now envisions adjusted OIBDA of at least $30 million, surpassing the earlier guidance of $23-$27 million.
Having garnered stellar revenues in 2017, World Wrestling Entertainment is an investors’ favorite now. We believe that the strategic initiatives undertaken by the company bode well for the yet-to-be reported quarter. In order to boost WWE Network’s revenues, the company has been implementing certain strategies including the development of fresh content, execution of customer acquisition and retention programs, increase in distribution platform, introduction of features and foraying into locations. Further, WWE Network is available in the Indian Subcontinent, Germany, Austria, Malaysia, Switzerland and Japan.
Revenues from international sponsorship surged in 2017, courtesy of the joining of blue-chip advertisers such as KFC, Nestlé, AT&T and other gaming partners. Moreover, in an effort to boost revenues, World Wrestling Entertainment had reached an agreement with sports marketing agency Lagardère Sports that helps it to gain international sponsorship. Lagardère Sports helps in building a partnership portfolio through its sponsorship proficiency and global sales channel in all international regions, excluding China.
However, the company’s home entertainment content revenues have been declining. has been reeling under lower. We noticed that in the first, second, third and fourth quarter of 2017home entertainment revenues declined 27%, 3.2%, 8% and 79%, respectively. The decline was led by consumers’ consistent shift to digital formats, downloaded or streamed over the Internet.
What’s the Estimate Scenario Like?
After registering a bottom-line increase of 5% in the fourth quarter of 2017, World Wrestling Entertainment is likely to record year-over-year growth of 62.5% in the first quarter of 2018 as well. This is quite evident from the Zacks Consensus Estimate for the quarter under review, which stands at 13 cents compared with 8 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate has improved by 3 cents in the last 30 days.
Analysts polled by Zacks now project revenues of $191.7 million, up from $188.4 million in the year-ago quarter. If all goes well, this will be the sixth straight quarter of top-line beat for the company. We note that net revenues of this sports entertainment company have risen 9% and 13% in the fourth and third quarter, respectively.
What the Zacks Model Unveils
Our proven model does not conclusively showsthat World Wrestling Entertainment is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
World Wrestling Entertainment has a Zacks Rank #2 but an Earnings ESP of 0.00%. Consequently, making surprise prediction difficult.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
IMAX Corporation (IMAX - Free Report) has an Earnings ESP of +5.67% and a Zacks Rank #3.
Discovery Communications has an Earnings ESP of +0.39% and a Zacks Rank of #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
How World Wrestling (WWE) Looks Just Ahead of Q1 Earnings
World Wrestling Entertainment, Inc. is scheduled to report first-quarter 2018 numbers before the opening bell on May 3. In the previous quarter, the company beat the Zacks Consensus Estimate by 5%.
The company’s earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters by an average of 8.6%.
Investors are counting on another estimate beat in the to-be-reported quarter. Let’s delve deepand take a look at the determinants of the first-quarter results.
Factors Influencing Results
Per management, WWE Network attracted an average of roughly 1.56 million paid subscribers in the first quarter of 2018. This reflects an increase of 5% from the year-ago figure. The company now envisions adjusted OIBDA of at least $30 million, surpassing the earlier guidance of $23-$27 million.
Having garnered stellar revenues in 2017, World Wrestling Entertainment is an investors’ favorite now. We believe that the strategic initiatives undertaken by the company bode well for the yet-to-be reported quarter. In order to boost WWE Network’s revenues, the company has been implementing certain strategies including the development of fresh content, execution of customer acquisition and retention programs, increase in distribution platform, introduction of features and foraying into locations. Further, WWE Network is available in the Indian Subcontinent, Germany, Austria, Malaysia, Switzerland and Japan.
Revenues from international sponsorship surged in 2017, courtesy of the joining of blue-chip advertisers such as KFC, Nestlé, AT&T and other gaming partners. Moreover, in an effort to boost revenues, World Wrestling Entertainment had reached an agreement with sports marketing agency Lagardère Sports that helps it to gain international sponsorship. Lagardère Sports helps in building a partnership portfolio through its sponsorship proficiency and global sales channel in all international regions, excluding China.
However, the company’s home entertainment content revenues have been declining. has been reeling under lower. We noticed that in the first, second, third and fourth quarter of 2017home entertainment revenues declined 27%, 3.2%, 8% and 79%, respectively. The decline was led by consumers’ consistent shift to digital formats, downloaded or streamed over the Internet.
What’s the Estimate Scenario Like?
After registering a bottom-line increase of 5% in the fourth quarter of 2017, World Wrestling Entertainment is likely to record year-over-year growth of 62.5% in the first quarter of 2018 as well. This is quite evident from the Zacks Consensus Estimate for the quarter under review, which stands at 13 cents compared with 8 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate has improved by 3 cents in the last 30 days.
Analysts polled by Zacks now project revenues of $191.7 million, up from $188.4 million in the year-ago quarter. If all goes well, this will be the sixth straight quarter of top-line beat for the company. We note that net revenues of this sports entertainment company have risen 9% and 13% in the fourth and third quarter, respectively.
What the Zacks Model Unveils
Our proven model does not conclusively showsthat World Wrestling Entertainment is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
World Wrestling Entertainment has a Zacks Rank #2 but an Earnings ESP of 0.00%. Consequently, making surprise prediction difficult.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
The Walt Disney Company (DIS - Free Report) has an Earnings ESP of +1.34% and a Zacks Rank of #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
IMAX Corporation (IMAX - Free Report) has an Earnings ESP of +5.67% and a Zacks Rank #3.
Discovery Communications has an Earnings ESP of +0.39% and a Zacks Rank of #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>