World Wrestling Entertainment (WWE) Tops Q3 EPS by 9c, Beats on Revenues

World Wrestling Entertainment (NYSE: WWE) reported Q3 EPS of $0.28, $0.09 better than the analyst estimate of $0.19. Revenue for the quarter came in at $186.4 million versus the consensus estimate of $176.77 million.

Fourth Quarter and Full Year 2017 Business Outlook

For the fourth quarter 2017, the Company projects average paid subscribers to WWE Network of 1.47 million (+/- 2%). The Company also estimates fourth quarter 2017 Adjusted OIBDA of approximately $31 million to $35 million.3, 5 This range represents an expected year-over-year increase from $20.5 million in the fourth quarter 2016 primarily due to the contractual escalation of television rights fees and the continued growth of WWE Networksubscribers as well as more favorable year-over-year comparisons in the Company’s fixed cost base. For the full year 2017, the Company projects average paid subscribers to WWE Network of approximately 1.53 million representing year-over-year growth of 8% and record Adjusted OIBDA of $108 million to $112 million.2, 3, 5

Third Quarter 2017 Highlights

• Revenue increased 14% to $186.4 million based primarily on the strong performance of the Company’s media, licensing and live event businesses
• Operating income was $33.9 million. Adjusted and reported OIBDA reached $40.4 million, representing an all-time record quarter on a reported basis1
• WWE Network’s average paid subscribers2 increased to 1.52 million over the third quarter 2017, consistent with the Company’s guidance
• Launched WWE Network in China with PPTV (a Suning media company). The service showcases WWE’s major live events, ground-breaking original series, documentaries and classic matches
• Launched localized weekly TV shows in Mexico and Central America. WWE Saturday Night, produced in Spanish with Fox Sports Mexico, will feature highlights of Raw and SmackDown
• Through the first nine months of 2017, digital engagement continued to grow with video views up 23% to 14.2 billion and social media engagements up 5% to 912 million from the prior year
• NBCU secured 20 new advertisers for WWE programs in the 2017-18 upfront, adding 70 over the past 3 years, and reaching a total of nearly 200 advertisers for WWE shows

2017 and 2018 Business Outlook

• The Company is increasing its guidance for 2017 Adjusted OIBDA1 to a range of $108 million to $112 million from its previous target of at least $100 million3
• The Company outlines its expectations for 2018, which include continued WWE Network subscriber growth, record revenue and targeted Adjusted OIBDA1 of at least $115 million3
• WWE’s current license agreements for Raw and SmackDown in the U.S. will expire on September 30, 2019 and in the U.K. and India on December 31, 2019. Management currently expects to announce its plans for U.S. distribution between May – September 2018, for the U.K. by year-end 2018, and for India in the first half of 2019

For earnings history and earnings-related data on World Wrestling Entertainment (WWE) click here.

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