- WWE’s income fell by 0ver 80% from a similar quarter a year ago.
- Since the year started, WWE stock has depreciated by nearly 50% from its April high.
- The sports entertainment firm has also revised guidance downwards signalling that the stock could fall further.
Shares of the Vince McMahon-led World Wrestling Entertainment (NYSE: WWE) fell drastically by over 15% Thursday after releasingthird-quarter resultsthat lowered the profit outlook and missed forecasts. After ending Wednesday at $ 66. 40, theprice of WWE’s sharesfell to $ 56. 04 at the close of Thursday’s session, a drop of 15. 65%. The stock is 44% lower from the yearly high of $ 110. 10 reached in April.
In the Q3 results, WWE reported revenues of $ 186 .3 million. This was a drop of less than 2% year-on-year. The sports entertainment company reported revenues of $ 188 .4 million in last year third quarter.
WWE Profits down by 83%
Net income for the third quarter also fell drastically year-on-year from $ 33 .6 million to $ 5.8 million . That’s a seismic 82 .7% drop. The company attributed this to a fall in excess tax benefits, lower operating performance and costs related to the new WWE headquarters. In March, the sports entertainment firm announced it wasshifting its global headquartersto a new office complex. It will still be based in Stamford, Connecticut.
For the full year 2019, WWE revised guidance on operating income before depreciation and amortization (OIBDA) from $ (million to $) million to $ 190 million. The sports firm owned largely by the McMahon family attributed the change to adelay encountered in signing new broadcasting rightsin the Middle East and North Africa (MENA) region.
WWE’s co-president and director, George Barrios, stated in an earnings call with analysts:
“… we are modifying our full year 2019 guidance to an adjusted OIBDA range of $ 180 million to $ 190 million which would still be an all-time record. The change is attributable to the delay in completing a previously contemplated agreement in the MENA region… ”
The streaming wars are here
As the online streaming wars heat up, withAT&T being the latest entrant with its HBO Max offering, it was only natural for related concerns to be raised during its earnings call.
Priced at $ 9. 99, the WWE Network, the streaming service of the sports entertainment firm is now among a crowded streaming field. Disney pricing its service at $ 6. 99 and Apple TV at $ 4. 99 represents bargains, relative to the WWE.
Barrios suggested that WWE is unlikely to reduce the fee noting that there’s a fundamental difference between its niche offering and the aforementioned general entertainment services. According to Barrios, WWE Network is ‘really targeted at a relatively small portion of our overall fan base but our most passionate fans’.
Well, those passionate fans fell by 9% to 1. 51 million in the third quarter. More pain lies ahead as the same subscribers are expected to fall to 1. 43 million in Q4, a 5.3% drop.
This article was edited by Samburaj Das.