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What to Watch When World Wrestling Entertainment Reports Earnings

Investors in World Wrestling Entertainment (NYSE:WWE) have been flying from the top rope. The sports entertainment company has absolutely crushed the market so far in 2018, soaring 170% compared to the SP 500‘s maudlin gain of just 2%. A couple of key announcements earlier this year have driven WWE’s stock into the stratosphere, as fears of wrestling’s declining popularity have been largely discounted.

With that type of performance, investors will be watching closely for any signs of weakness when WWE reports its third-quarter financial results on Thursday, Oct. 25 before the market open. Let’s review its most recent quarter and several recent announcements to see of the company can maintain its high-flying ways, or if it’s about to get tossed out of the ring. 

WWE wrestlers The Showoff and The Architect in an Iron Man match for the Intercontinental Championship. Image source: WWE.

A winning team

Despite high expectations going into its second quarter, WWE lived up to the hype. The company reported record revenue of $281.6 million, an increase of 31% year over year and powering past analysts’ consensus estimates for an increase of 11.6%. That resulted in adjusted operating income before depreciation and amortization (OIBDA) of $43.5 million, up 79% year over year, and earnings per share of $0.11, which soared 83% compared to the prior-year quarter. 

WWE’s growth came largely from television agreements to broadcast its programming, while revenue from live events was nearly breakeven. Revenue from the media segment increased 48% year over year, while consumer product sales increased by 9%. Average paid subscribers increased to 1.8 million, up 10% compared to the prior-year quarter.

Several big announcements last quarter helped boost the stock over the top rope. WWE inked five-year broadcast deals with both Twenty-First Century Fox and Comcast. Fox signed on the dotted line for

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