Will WWE Manage to Pull a Surprise This Earnings Season?
World Wrestling Entertainment Inc. WWE is scheduled to report third-quarter 2015 financial numbers before the opening bell on Oct 29, 2015.
In the previous quarter, the company reported earnings per share of 7 cents, well ahead of the Zacks Consensus Estimate of break-even point. Here’s a discussion on the determinants of third-quarter results.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that WWE is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen.
WWE has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 6 cents. The company carries a Zacks Rank #3 (Hold), which when combined with ESP of 0.00%, makes surprise prediction difficult.
Factors Influencing This Quarter
Decline in pay-per-view revenues is a major concern for WWE.In 2014, the companygeneratedpay-per-view revenues of $45.2 million in comparison to $82.5 million and $83.6 million in 2013 and 2012, respectively. These represent 8%, 16% and 17% of total net revenue in 2014, 2013 and 2012, respectively. Further decline in pay-per-view revenue will hamper the company’s numbers in the third-quarter.
Although the company has been taking up various initiatives like cost-cutting measures, growing TV rights and adopting innovation to improve its performance, we remain concerned as the entertainment industry is highly dependent on ever-changing consumer preference patterns.
Stocks Poised to Beat Earnings Estimates
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:
Facebook, Inc. FB has an Earnings ESP of +5.71% and a Zacks Rank #1 (Strong Buy).
Nexstar Broadcasting Group, Inc. NXST has an Earnings ESP of +8.93% and a Zacks Rank #2 (Buy).
Time Warner Inc. TWX has an Earnings ESP of +0.92% and a Zacks Rank #3.
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