Source: Reuters
BOSTON (Reuters) – World Wrestling Entertainment Inc. on Thursday posted a higher-than-expected quarterly profit on better sales of branded merchandise and revenue from its Web businesses, sending shares up 12 percent.
The sports entertainment company said its fiscal first-quarter net income was $11.3 million, or 16 cents per share, compared with $11.2 million, or 16 cents per share, a year earlier.
Revenue for the quarter ended July 28 fell slightly to $93.3 million from $93.8 million on a decline in cable advertising revenue.
Analysts on average had forecast the company would report profit of 10 cents a share on revenue of $91 million, according to Reuters Estimates.
WWE produces live stage shows, television programming and home videos centered around fights among characters who play out planned story lines. It also licenses WWE products, sells Web advertising and produces pay-per-view events such as Backlash, Judgment Day and Great American Bash.
Soleil – Research Associates analyst Marla Backer said analysts had expected a decline in profit in the quarter because the company had run just two events overseas, versus seven in the year-earlier period.
They were surprised to see that the fall in international business was offset by stronger sales of WWE-branded consumer merchandise, as well as revenue from Web sites and other digital media, she said.
“They’re investing in future growth by developing new markets,” Backer said.
In addition to branded merchandise and digital media, the company is looking to boost its fan base and sales by expanding in Latin America and developing feature films, made-for-television movies and direct-to-video films, she said.
Consumer products and digital media accounted for about 31 percent of revenue during the quarter, up from 23 percent a year earlier. The rest of the company’s sales were generated by live and televised entertainment programming including SmackDown, RAW and Extreme Championship Wrestling.
Shares in the Stamford, Connecticut-based WWE rose $1.85 to $17.38 in afternoon trade on the New York Stock Exchange. Over the past year they have traded between $11.93 and $18.54.
