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Things to Note Ahead of World Wrestling's (WWE) Q4 Earnings

Zacks Equity Research

World Wrestling Entertainment, Inc. WWE is slated to report fourth-quarter 2019 results on Feb 6, before the opening bell. We note that the company’s earnings per share outperformed the Zacks Consensus Estimate in three of the trailing four quarters. In the last reported quarter, the company surpassed the consensus mark by a wide margin.

The Zacks Consensus Estimate for fourth-quarter earnings has moved south by a penny to 71 cents over the past 7 days. This suggests an increase of 61.4% from the year-ago period’s reported figure. Further, the consensus mark for revenues is $334.4 million, indicating growth of 22.7% from the figure reported in the year-ago quarter.

Key Factors to Note

WWE has been gaining from its focus on expanding original content, driving subscriber count, raising content rights fees and monetization of video content across digital and DTC platforms. Further, improvement in WWE’s engagement metrics, renewal of distribution agreement and expectation of significant increase in fourth-quarter 2019 revenues, courtesy of new U.S. content distribution agreements are likely to reflect in fourth-quarter adjusted OIBDA.

World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise

World Wrestling Entertainment, Inc. Price, Consensus and EPS Surprise

World Wrestling Entertainment, Inc. price-consensus-eps-surprise-chart | World Wrestling Entertainment, Inc. Quote

 

On the last earnings call, management guided adjusted OIBDA between $108 million and $118 million for the quarter under review, which is considerably up from $64.4 million reported in the year-ago period.

Also, strategies such as the development of fresh content, execution of customer acquisition and retention programs, introduction of features and foray into new regions bode well for WWE.

However, the company has been struggling with its subscriber base. Management expects average paid subscribers of approximately 1.43 million for the fourth quarter, which indicates a decline of 10% from the year-ago period. Apart from this, fall in ticket sales during live events or drop in the number of live events remains concern.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for World Wrestling this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although World Wrestling carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks with Favorable Combinations

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:
 
DISH Network Corp. DISH currently has an Earnings ESP of +1.94% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cable One, Inc. CABO presently has an Earnings ESP of +3.89 and a Zacks Rank #2.

Discovery, Inc. DISCA currently has an Earnings ESP of +0.21% and a Zacks Rank #3.

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