WWE 3rd Quarter Conference Call Report

– Thanks for reading 411’s recap of the WWE 3rd Quarter Conference Call.

– You can check out the FULL 3rd Quarter Financial Report at this link. It is a long read, but if you are interested in what areas they are down in, and where they did make money as opposed to last year, it is a very interesting read. Bottom line, they made $109 million this quarter, down from the $111 at the same time last year. Not a huge drop, but there are small drops across the board, which never makes anyone happy.

The call started at 11:01AM.

Donna Goldsmith takes over the call, and says that Vince is unable to join us today. Damn. She says they had a 10% decline in live attendance, and a 16% drop in PPV buys.

Global relations with Mattel is very profitable as they have increased sales by 172%. Toys sales in Mexico have helped international toy sales increase 62%.

She mentions their debut in China and how they hope to be able to venture into that market in the future.

With Shawn Michaels and Batista leaving after WrestleMania, and Chris Jericho, CM Punk, Undertaker and HHH being injured or taking long leaves, they feel that has had an effect on live attendance and PPV buy drops.

They put over Alberto Del Rio, Wade Barrett and NEXUS as new stars created.

Operating income was $20.3 million as compared to $14.5 million in the prior year quarter. Net income was $14.3 million, or $0.19 per share, as compared to $8.9 million, or $0.12 per share, in the prior year quarter. Impacting comparability to the prior year quarter are production tax credits recorded in both current and prior year quarters. Excluding the impact of these credits, Adjusted Operating income was $14.2 million as compared to $12.0 million in the prior year quarter. Adjusted Net income was $10.3 million, or $0.14 per share, as compared to $7.4 million, or $0.10 per share.

As far as WWE Studios go, they recorded revenue of $7.6 million related to all seven of the released films as compared to $3.0 million in the prior year quarter. Overall, WWE Studios lost $0.6 million due to marketing costs, but feel that the WWE Studios is a viable commodity, due to the fact that it expands the reach of their talent.

They feel that the new film strategy, done with Legendary and Knucklehead will lead to a more profitable future.

They have averaged 5,200 fans at live events.

TV revenue has increased 10%, mainly due to new international TV rights expansion.

Time for the Q&A portion of the call.

They discuss working on talent and storylines, but note that they have to watch expenditures due to the economy.

As far as PPV buys being down, but say that due to the price increase, revenue is basically the same. They do note that the attractions need to be strong to increase buys.

On WWE Studios, Legendary was released in quarter three, but most of the DVD profits will be included into the fourth quarter. Things will be rocky to begin with, due to the new release strategy.

Knucklehead looks to do well, due to broader distribution, as Legendary is a Wal-Mart exclusive until the end of 2010.

On merchandize sales with new talent, Nexus is doing well, and have risen, due to John Cena’s inclusion. Wade Barrett and Alberto Del Rio are tracking well, and while not at the level of other top stars, they have high hopes for them.

A caller praises WWE for their cost cutting measures and how they have done well in a bad economy.

On the WWE Cable network, they are still looking into it, and more will happen after the beginning of 2011.

On Mattel, they discuss the focus on selling to kids instead of collectors. Donna Goldsmith says that both markets are important, and collectors are more important due to the fact that they are less fickle and buy just about everything. Mattel has been a great partner, due to their global reach.

They hen discuss keeping prices at a variety, so that there are always lower priced items for people with less disposable income.

The call ends at 11:32AM.