WWE shares dropped 15.5% to $41.50 Thursday after it reported earnings of 78 cents a share on revenue of $322.8 million, an 18.5% increase from the year-earlier quarter. Analysts were expecting the company to report earnings of 74 cents a share on revenue of $333.3 million.
“During the fourth quarter, we expanded the reach of WWE’s live programming and further engaged with diverse audiences across platforms and formats," said CEO Vince McMahon. “We believe the value of live sports will continue to increase, particularly in today’s evolving media landscape, and we are well positioned to take advantage of this trend to maximize the value of our content."
However, the company also said there was a delay in completing a Middle East distribution agreement and it saw lower business performance than expected.
"As we work to strengthen engagement in 2020, we are pursuing several strategic initiatives that could increase the monetization of our content, including the distribution of content in the Middle East and India,” said Chief Financial Officer Frank Riddick.
However, the "outcome of these initiatives is subject to considerable uncertainty," Riddick said.
Thursday’s drop comes ahead of the debut of the XFL, the professional football league that is owned by WWE CEO Vince McMahon’s Alpha Entertainment, on ABC/ESPN and Fox Sports.
The XFL will kick off its season this weekend with a pair of games on Saturday and two more on Sunday. The league features eight teams that are centrally owned by the XFL.
This is the second try for the XFL, which originally was founded in 1999 but played only one season in 2001.