WWE’s stock price took a steel chair to the head Thursday as the pro-wrestling giant posted revenues and profits that fell short of Wall Street estimates.
Shares in the Connecticut-based company — which got hammered last week after WWE chairman and CEO Vince McMahon abruptly ousted his co-presidents, George Barrios and Michelle Wilson — plunged as much as 18 percent to near a two-year low Thursday after it said it raked in $322.8 million in the fourth quarter of last year.
That was the highest in WWE’s history but lower than analysts’ expectation of $333.3 million, according to a Bloomberg estimate. The stock was recently off 11.9 percent at $43.16.
The promoter also told investors Thursday that it’s examining “strategic alternatives” for its WWE Network streaming service, which saw a 10 percent drop in average paid subscribers last quarter.
The results came a week after the surprise ousters of McMahon’s longtime lieutenants Barrios and Wilson, which led WWE shares to sink more than 21 percent last Friday. Wilson and Barrios had been slated to join McMahon on WWE’s Thursday morning earnings conference call but were apparently replaced by Frank Riddick, whom McMahon tapped as WWE’s interim chief financial officer last week.
WWE also missed analysts’ expectations for adjusted operating income before depreciation and amortization, reporting $107.6 million for the fourth quarter of 2019. That was 67 percent above the year prior but less than the Street’s estimate of $110.8 million. The company expects $60 million to $65 million for the first quarter of 2020, below the average estimate of $67.5 million, according to Bloomberg.
“With the delay in completing a Middle East distribution agreement as well as lower business performance than anticipated, our results were at the low-end of guidance,” Riddick said in a statement Thursday.
WWE attributed last year’s revenue gains to increases in content rights fees. But that jump was offset in part by a drop in subscription revenue from the WWE Network, which broadcasts WWE’s pay-per-view events and scheduled programs, the company said. Live event revenues also dropped 13 percent last year as WWE staged 56 fewer events and saw lower average attendance, according to the company.
The options WWE is considering for its streaming service include enhancing its free tier and selling the rights to its content, according to McMahon. Changes for WWE Network are among the efforts WWE said it is pursuing to boost the monetization of its content this year and beyond, along with the distribution of content in the Middle East and India, the company said.