World Wrestling Entertainment shares pummeled on weak EPS view
BANGALORE (Reuters) - Shares of World Wrestling Entertainment (WWE.N) fell 15 percent on Monday after the sports entertainer forecast fourth-quarter earnings far below Wall Street estimates.
The company, known for its wrestling action through franchises such as "Raw" and SmackDown" and athletes such as Triple H and John Cena, on Friday forecast fourth-quarter earnings of 8-10 cents a share.
Analysts on average expect 16 cents a share, according to Thomson Reuters I/B/E/S.
While the company did not provide any reason for the lower-than-expected forecast, Wedbush Securities analyst Michael Pachter said the outlook pointed to a revenue miss.
"I am sure the weakness is due to their pay-per-view and live events businesses being down," Pachter said.
Pay-per-view programing and ticket sales to live events both fall within the company's live and televised entertainment segment, which accounted for 70 percent of 2009 revenue.
The company could have done a better job of communicating its expectations for the quarter earlier so as to avoid Wall Street being taken by surprise, Sterne, Agee & Leach analyst Arvind Bhatia said.
The Stamford, Connecticut-based company, which has struggled against a still sluggish economy and felt the pinch of consumers cutting back on discretionary spending, reported a decline in sales at all its major segments in the third quarter.
The company's shares, which have shed 14 percent of their value over the last six months, were down $1.18, or 9 percent, at $12.32 in midday trade on the New York Stock Exchange. They touched a year low of $11.50 earlier in the session. (Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Maju Samuel)