World Wrestling Entertainment (WWE) Misses Q4 EPS by 12c

World Wrestling Entertainment (NYSE: WWE) reported Q4 EPS of $0.07, $0.12 worse than the analyst estimate of $0.19. Revenue for the quarter came in at $211.3 million versus the consensus estimate of $208.55 million.

2018 Business Outlook

The Company evaluates the operating performance of its segments based on financial measures such as revenue, OIBDA and Adjusted OIBDA. To further facilitate the analysis of the Company’s operating performance, the Company plans to change its primary measure of performance from OIBDA to Adjusted OIBDA, and to modify its definition of Adjusted OIBDA to exclude stock-based compensation expense. The Company plans to begin reporting results using this revised definition with the communication of first quarter 2018 results.5

For the first quarter 2018, the Company estimates Adjusted OIBDA (excluding stock-based compensation expense) of $23 million to $27 million.6,7 As compared to first quarter 2017 results, this range represents higher profits from the increased monetization of video content, which are offset by the timing of lower licensing revenue associated with the adoption of a new FASB standard for revenue recognition. For the first quarter 2018, the Company also projects average paid subscribers to WWE Network of approximately 1.53 million.

In 2018, management expects the Company to achieve another year of record revenue and previously targeted Adjusted OIBDA of at least $115 million,6,7 which would represent another all-time record. Based on the Company’s revised definition of Adjusted OIBDA, which excludes projected stock compensation expense, this equates to an approximate 2018 Adjusted OIBDA target of at least $140 million.6,7

WWE is unable to provide a reconciliation of first quarter and full year 2018 guidance to GAAP measures as, at this time, WWE cannot accurately determine all of the adjustments that would be required.

In early 2017, management discussed a step-up in capital expenditures to expand the Company’s overall production capacity. The related spending to retrofit a recently purchased facility was largely delayed until 2018 as plans were finalized. For 2018, the Company anticipates capital expenditures of $50 million to $70 million, reflecting in part the shift in spending from 2017.

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

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