WORLD WRESTLING ENTERTAINMENT 2Q NET INCOME DECLINES
- 12/05/2006 (11:53:27 am)
- Press Release
Due to increased expenses…..
World Wrestling 2Q Net Income Declines
Tuesday December 5, 10:51 am ET
Tuesday December 5, 10:51 am ET
World Wrestling 2nd-Quarter Earnings Decline As Expenses Increase
STAMFORD, Conn. (AP) -- World Wrestling Entertainment Inc., a producer of wrestling matches for televised and live viewing, on Tuesday said fiscal second-quarter profit fell 11 percent as expenses increased. Net income for the quarter ended Oct. 27 declined to $10.4 million, or 15 cents per share, from $11.7 million, or 17 cents last year. Analysts expected net income of 13 cents per share, according to a poll by Thomson Financial.
Revenue grew 8 percent to $96.2 million, from $88.9 million last year, helped by expansion of World Wrestling Entertainment home video and digital media businesses, along with higher attendance at live events.
Television ad revenue fell nearly 81 percent to $1.5 million, from $7.7 million, due to a television distribution agreement with USA Network, effective October 2005. Because of the agreement, World Wresting Entertainment no longer takes part in domestic television advertising sales.
Profit contribution, or net revenue minus the cost of revenue, fell 8 percent, due in part to the absence of domestic television ad revenue, which has a high profit margin, and the increase of revenue from businesses with lower profit margins, such as live events and merchandise.
Selling, general and administrative expenses rose 24 percent to $24.6 million. The prior-year quarter results were increased by $3.4 million from legal settlements.
World Wrestling Entertainment is transitioning to reporting on a calendar-year basis, and is in an eight-month transition period between May 1 and Dec. 31. The company affirmed 2006 earnings of 43 cents per share from continuing operations during the transition period.
Shares rose $1.04, or 6.4 percent to $17.18 during morning trading on the New York Stock Exchange. The stock has traded in a band of $14.02 to $18.54 over the past 12 months, and is up 12 percent year-to-date.
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