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Earnings Results: WWE’s stock rises on jump in sales in post-Vince McMahon era

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World Wrestling Entertainment Inc. is finding that life without Vince McMahon so far is a slam dunk.

WWE shares
WWE,
-1.49%

climbed 3% in extended trading Wednesday after it rang up revenue and profits that topped analysts’ estimates. Fiscal third-quarter net income was $41.7 million, or 49 cents a share, down from $43.5 million, or 52 cents a share, in the year-ago quarter. Adjusted earnings were 65 cents per share. Revenue improved 19% to $304.6 million from $255.8 million a year ago.

Analysts surveyed by FactSet had expected earnings of 50 cents a share on sales of $283 million.

Media rights accounted for 76% of WWE’s quarterly revenue, or $233 million. Analysts had expected $222.3 million. Revenue from live events ($35.2 million) and consumer products ($36.4 million) each improved more than 25% year over year.

“We’re firing on all cylinders,” WWE Chief Financial Officer Frank Riddick said in a conference call with analysts after the results were released.

WWE shares have soared 57% this year, including 12% over the past three months. The broader S&P 500 index
SPX,
-2.50%

is down 21% in 2022.

McMahon, WWE’s longtime chairman and CEO, stepped down and announced his retirement in July following a report that he paid a $12 million in hush money to cover up allegations of sexual misconduct and infidelity. WWE said Wednesday that a special committee investigating McMahon’s conduct has been disbanded.

WWE watchers have pointed to a recent bump in TV ratings that could lead to an upgrade in live-rights fees as more wrestling fans embrace richer storylines in the post-Vince WWE.

“Consumer metrics have improved somewhat since Vince left due to the quality of the content,” Brandon Thurston, editor of Wrestlenomics, told MarketWatch. “Some fans say not much has changed, but clearly enough has changed to improve TV ratings and attendance, at least in the short term.”

“Monday Night Raw” is holding up well in year-over-year comparisons despite competition from Monday Night Football, while Friday night’s “Smackdown” has drawn better ratings year-over-year in four of the past five months, according to Thurston.

Whether a bolstered TV audience, bigger live-gate revenues and other revenue gains will lead to the long-rumored sale of WWE has sparked another round of speculation. The departure of McMahon, who lorded over the organization for decades and was reluctant to sell, would seem to renew chatter of a sale to, perhaps, business partner Comcast Corp.
CMCSA,
-2.06%
.

However, the ascension of McMahon’s daughter, Stephanie, to co-Chief Executive and her husband, Paul Levesque, to chief content officer, in WWE’s executive ranks might dissuade such conversations, Thurston quickly added.

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