WWE shares were down in after-hours trading Thursday after falling well short of fourth-quarter earnings and revenue forecasts, Sportico’s sister publication Variety reports.
In Q4, revenue fell 26% from the prior-year quarter to $238.2 million. Net income was $13.6 million, or 16 cents per diluted share. Analysts had predicted the sports entertainment company would post per-share earnings of 30 cents and revenue of $245.69 million.
WWE stated the decrease came as a result of a lack of live ticketed events because of the pandemic: 310 WWE live events were held in 2019 compared to 42 events held in 2020. In addition, the company expects COVID-19 related restrictions on live events to continue “at least through the first half of 2021.” However, it was previously announced that WWE’s flagship pay-per-view, WrestleMania, will take place at Raymond James Stadium in Tampa, Florida, with limited fan attendance due to the state’s easing of restrictions.
For 2020, revenue was $974.2 million, an increase of 1% compared to 2019. The company further estimated it can achieve 2021 Adjusted OIBDA of $270 million to $305 million driven by its deal with Peacock that will see WWE Network content migrate to the AVOD service as well as the ramping up of live events both domestically and internationally. However, WWE expects “significant” increases in year-over-year expenses as employees return from furlough, as well as higher production costs associated with its ThunderDome residency at Tropicana Field.
For the full year, operating income was $208.6 million, an increase of 79% compared to 2019. Per WWE, this was “driven by the substantial rise in content rights fees, which have a high incremental margin.”
“During the fourth quarter, we continued to produce live content in new ways, which successfully increased audience interaction and engagement,” said Vince McMahon, WWE Chairman & CEO, in a statement. “As we continued to adapt our business to the changing media environment, we completed an important agreement to license WWE Network content to Peacock, which we expect will expand the reach of our brands and enhance the value of our content.”
With assistance from Randall Williams.