WWE Third Quarter Results: Revenues Down From 2011, Vince McMahon Comments
|By Raj Giri||November 01, 2012 | Comments|
WWE today announced financial results for its third quarter ended September 30, 2012. Revenues totaled $104.2 million as compared to $108.5 million in the prior year quarter. Operating income was $5.0 million as compared to $15.9 million in the prior year quarter. Net income was $3.5 million, or $0.05 per share, as compared to $10.6 million, or $0.14 per share, in the prior year quarter. Excluding items that impacted comparability on a year-over-year basis, Adjusted Operating income was $7.1 million as compared to $21.0 million in the prior year quarter, and Adjusted Net income was $5.0 million, or $0.07 per share, as compared to $14.1 million, or $0.19 per share, in the prior year quarter. The decline in earnings, on both an "As Reported" and "Adjusted" basis, was driven by $6.6 million in incremental expenses from the return to a more normalized level of management incentive compensation in the current year quarter compared to a reduced level of management incentive compensation in the prior year quarter, a reduction in net home video revenue, and lower video game sales primarily from one fewer video game release in the current year quarter.
"In the third quarter, we continued to make important progress on our key strategic initiatives, expanding our content and distribution and enhancing our brand strength," stated Vince McMahon, Chairman and Chief Executive Officer. "The production and licensing of new programs, including a third hour of Raw, the WWE Main Event and WWE Saturday Morning Slam, as well as the development of online distribution on Hulu Plus exemplify our achievement of these goals. The performance of our new programs, which have attracted an average audience 14% to 50% higher than the viewership of the programs they replaced, demonstrate our ability to build consumer interest, which forms the foundation of our proposed WWE Network."
"Our fundamental operating metrics showed continued strength. Average attendance increased 6% at our live events in North America and Pay-Per-View buys increased 13% for the three comparable events in the quarter," added George Barrios, Chief Financial Officer. "While the quarter had an anticipated decline in earnings, based on our results to-date, we are raising our financial forecast for the full year. We expect that our 2012 earnings will be 15% to 25% above our 2011 net income and 10% to 15% above our 2011 EBITDA results, both on an 'as reported' basis."
Comparability of Results
Our current year quarter results included $2.1 million in network-related operating expenses. The prior year quarter results included a film impairment charge of $5.1 million. In order to facilitate an analysis of our financial results on a more comparable basis, where noted, we have adjusted our results to exclude these items from our results.
Three Months Ended September 30, 2012 - Results by Region and Business Segment
Revenues declined 4% reflecting a $4.7 million reduction from outside North America. Revenues from North America were essentially flat to the prior year quarter as increases from our Live and Televised Entertainment segment were offset by declines in our Consumer Products and WWE Studios businesses. Revenues from outside North America declined 16% primarily due to a reduction in the EMEA region from changes in the number of live events and weekly telecasts, which impacted our Live and Televised Entertainment segment.
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