World Wrestling Entertainment (WWE) Q3 Earnings Preview

World Wrestling Entertainment, Inc. (NYSE:WWE) is scheduled to report third-quarter 2016 financial numbers, before the opening bell on Oct 27. In the previous quarter, the company’s earnings missed the Zacks Consensus Estimate by 87.5%.

Notably, the company’s earnings have surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average earnings beat of 152.4%. Here’s a discussion on the determinants of the third quarter results.

Zacks Model Shows Unlikely 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 (Strong Buy), 2 (Buy) or 3 (Hold) 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 17 cents. The company holds a Zacks Rank #3 which increases the predictive power of ESP but an ESP of 0.00% makes a surprise prediction difficult.

Factors Influencing This Quarter

In order to boost WWE Network’s revenues, the company has been implementing certain strategies which include developing fresh content, executing customer acquisition and retention programs, increasing distribution platform, introducing new features and foraying into new locations. These initiatives are expected to boost the company’s revenue higher.

For third-quarter 2016, WWE anticipates average paid subscribers of 1.49 million, signifying a year-over-year increase of nearly 27%. Adjusted OBIDA is projected in the range of $24–$28 million.

On the flip side, WWE operates in the highly competitive market of entertainment video. Further, decline in pay-per-view revenues over the past four years is another major concern for the company.

WORLD WRESTLING Price, Consensus and EPS Surprise

Stocks Poised to Beat Earnings

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:

Amazon.com, Inc. (NASDAQ:AMZN) has an Earnings ESP of +10.47% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

New Media Investment Group Inc. (NYSE:NEWM) has an Earnings ESP of +35.29% and carries a Zacks Rank #3.

Time Warner Inc. (NYSE:TWX) has an Earnings ESP of +1.49% and also carries a Zacks Rank #3.

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