Shares of World Wrestling Entertainment (WWE) - Get Report plummeted after the company reported lower-than-expected revenue for the third quarter and reduced its 2019 earnings guidance.
Net income slid to $5.8 million, or 6 cents a share, from $33.6 million, or 37 cents a share, a year earlier. That fall stemmed mainly from a decrease in excess tax benefits. Analysts polled by FactSet expected third-quarter profit of 2 cents.
But revenue dipped 1.1% to $186.3 million, below the FactSet consensus forecast of $191.5 million. Third-quarter 2018 revenue was $188.4 million. All three of the company's business segments lagged revenue expectations in the latest period: media, live events and consumer product.
Media revenue climbed 2.8% to $146.1 million, but trailed FactSet's analyst consensus of $146.8 million.
Live events revenue shed 13% to $23.2 million, lagging forecasts of $26.1 million. Consumer products revenue dropped 13% to $17 million, trailing projections of $19.2 million.
As for guidance, WWE lowered its estimate for full year 2019 adjusted OIBDA (operating income before depreciation and amortization) to a range of $180 million to $190 million. Previously it projected the metric would total at least $200 million.
"The change is attributable to the delay in completing a previously contemplated agreement in the MENA (Mideast North Africa) region and the impact of accelerated investment to support content creation," the company said in a statement. "While the Company continues to work toward the completion of a MENA agreement, no assurances can be given in this regard."
WWE shares traded at $55.96, down 15.77%.
This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.
