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World Wrestling Entertainment Earnings Report Raises Some Questions

World Wrestling Entertainment (NYSE: WWE) is having a good year, but some important questions came up in its recent earnings report.

In this video clip from "Beat & Raise," recorded on Nov. 5, Fool.com contributors Brian Withers and Toby Bordelon discuss the highlights from the wrestling specialist's announcement.

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Brian Withers: I'm going to turn it over to Toby, who's going to cover World Wrestling Entertainment, which only has the second best logo today after Datadog. [laughs]

Toby Bordelon: Yeah, it's free logo, isn't it? Now, I don't know if you follow wrestling, Brian, if you're a fan of wrestling entertainment.

Withers: I don't.

Bordelon: You don't. I'm not a huge fan, but I do remember back in the day, I remember following this company before it had this little trademark dispute with the World Wildlife Federation, it was known as a WWF way back in the day. The days of Undertaker and Kane, even Hulk Hogan. I mean, they come a long way since then. Good quarter for them. I think revenue up 15 percent. Borderline. I mean, meet, miss, depends on your perspective. They beat earnings per share.

They did raise their outlook a little bit. They said they expect [inaudible 03:17:39] percent higher OIBDA. I don't know how to pronounce that. If you're looking at that and say what is that, good question. It's maybe the first time I've ever actually seen that particular acronym, operating income before depreciation and amortization. It's one of those non-GAAP measures. If they want to give it to us, fine, we'll judge them on that. I do like operating income, so maybe it's a legit metric there to look at.

But that revenue increase was really they said driven by higher ticket sales, the primary driver within their merchandise. Because what's happened is they are back on tour. Live touring is back. They return to events toward in July. They're seeing ticket demand outpace their expectations. North American events, they said, attracted the highest quarterly attendance in over a decade. The people want their WWE, Brian.

That's what the people want. Apparently, that's what they're delivering. SummerSlam in Vegas was a record-breaking crowd, with sponsorship and merchandise sales 155% higher than SummerSlam 2019.

So pre-pandemic. Pretty good. It looks like they're coming back pretty well. Digital video views are also up 39%. Hours consumed are at a record, 411 million, up 20%. That's interesting because you would think in this quarter, coming out of the pandemic, at home video streaming might be a little bit down. But for them, they are doing pretty well on that. I like with what I see.

They did announce a new CFO. That was a little random and unexpected. I don't quite know what to make of that. They haven't given any reason for the departure yet, so I'm not really sure what's going on there.

The CFO, Kristina Salen, she left after 15 months, so she wasn't there very long. The gentlemen replacing her, Mr. Frank Riddick III is a board member, so he's been with the company since 2008. So he knows what's going on. It's not just some random new hire.

But a little bit of a concern there. They did also do a lot of share repurchasing and you wonder why. You would think for a company like this coming out of a pandemic, there's room for investments, at least initially. But here we go, we're getting a lot of share repurchases.

But not a bad quarter, stocks down a little bit. But I like what I see and I like that they seem to be doing very well relative to their pre-pandemic metrics and hope we get everything back up and running again pretty soon.

Withers: Yeah, it's really interesting. You say they're seeing record crowds and they may be on track to beat their OIBDA next quarter. We'll have you back to report on their made-up metric.

Demitri Kalogeropoulos has no position in any of the stocks mentioned. Toby Bordelon has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog. The Motley Fool recommends World Wrestling Entertainment. The Motley Fool has a disclosure policy.


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