First-quarter revenues at WWE were up a solid 10 percent from the prior year quarter, despite a significant drop in net income.
The Stamford company reported net revenue for the quarter ending March 31 of $188.4 million, up from the previous year quarter’s $171.1 million, while net income of $0.9 million was down from $13.9 million from the prior year quarter. Operating income was $4 million as compared to $22 million in the prior year quarter.
“As anticipated, our earnings reflected the timing of certain expenses, a significant portion of which are expected to reverse over the coming months,” said WWE Chief Strategy and Financial Officer George Barrios. “As we continue to focus on producing engaging content across all platforms, we remain on track to achieve our 2017 financial objectives with record revenue, record adjusted OIBDA (operating income before depreciation and amortization) results and record subscriber levels.”
WWE said that the expenses included $5.6 million primarily related to legal matters and other contractual obligations and $2.1 million in film impairment charges, noting that there were no such items in the first quarter of last year. Excluding items affecting comparability, adjusted OIBDA was $18.6 million as compared to $27.6 million in the prior year quarter.
WWE Network averaged 1.49 million paid subscribers over the first quarter 2017, a 16 percent increase from the first quarter 2016. Its second quarter should show significant improvement thanks in part to WWE’s signature WrestleMania event held April 2 at the Orlando Citrus Bowl. WrestleMania reached a record 1.95 million global households on WWE Network alone, making it the most-watched WrestleMania in history. The company also launched an e-commerce site, WWEShop.in, in India for the first time on April 3, concurrent with the airing of WrestleMania in that nation. WWE is projecting average paid subscribers of at least 1.63 million in the second quarter and a 2017 adjusted OIBDA of approximately $13 million to $17 million.
The range of financial performance projected for the second quarter would result in adjusted OIBDA for the first half of 2017 that is essentially flat to the prior year period, the company said. Management anticipates adjusted OIBDA over the second half of 2017 of $100 million, which would be up about 25 percent from 2016 adjusted OIBDA of $80.1 million and represent an all-time record.
WWE further noted that it has completed a multiyear agreement naming StubHub as its exclusive ticket resale marketplace for fans in the U.S. and Canada.
“As we leverage continuing innovation to extend our reach in India, China and around the world, we are confident that the enduring and increasing global power of our brands will provide a solid foundation for long-term growth,” said WWE Chairman and CEO Vince McMahon.