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World Wrestling Entertainment shares plummeted after the company managed to beat Wall Street’s earnings expectations, but revenue disappointed and the company lowered its 2019 income guidance.
WWE stock (ticker: WWE) dropped more than 15% on the bad news. Before the earnings news came out Thursday morning, the stock was down about 7% in 2019, compared with the S&P 500’s gain of about 20%.
The company reported $186.3 million in revenue and net income of 6 cents a shares. Analysts had been expecting $191.5 million in revenue and 2 cents per share in earnings. Revenue was hit by an 18% drop in North American ticket sales and a 16% fall in online sales of merchandise.
The worst news, however, came in the management’s guidance The company cut its forecast for full-year 2019 operating income before depreciation and amortization from $200 million to between $180 million and $190 million.
The old prediction “assumed continued improvement in WWE’s engagement metrics, a second large scale event in the MENA region, and the completion of a media rights deal in the MENA region,” the company said in a release, referring to the Middle East and North Africa.
While “the Company is holding a second large-scale event today in Riyadh, Saudi Arabia, its previously contemplated agreement for the region has not yet been completed,” the release said.
Operating income before depreciation and amortization is an unusual metric for profit guidance. The company said that it is unable to reconcile its fourth quarter or full-year guidance into GAAP measures because it “cannot accurately determine all of the adjustments that would be required.”
Write to Ben Walsh at ben.walsh@barrons.com