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WWF 1Q profit slammed
August 23, 2001: 11:06 a.m. ET

Lower revenue leads to profit drop, but gain from sale lifts EPS over target
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NEW YORK (CNNfn) - World Wrestling Federation Entertainment Inc. said Thursday its fiscal first-quarter profit was slammed by lower ratings and increased operating costs.

The Stamford, Conn.-based company earned just under $12 million, or 16 cents a share, for the quarter ended July 27, down from $16.3 million, or 22 cents a share, it earned from continuing operations a year earlier. But it beat the forecast of 10 cents a share of analysts surveyed by earnings tracker First Call.

About half the profit -- $5.8 million, or 8 cents a share -- came from the revaluation and gain on the sale of its position in one of its licenses. Selling, general and administrative expenses were $25.6 million, up $5 million from a year earlier. The company cited increased overhead of its entertainment complex in Times Square in New York, higher advertising and promotion expenses, and increased consulting fees.

Revenue fell to $90.7 million from $101.9 million a year earlier. Most of the drop came from a 32 percent decline in branded merchandise revenue to $18.3 million from $26.7 million a year earlier. WWF said the decline was "principally due to a decrease in licensing revenues resulting from the timing of cash receipts." Revenue from live and televised entertainment slipped 4 percent to $72.4 million from $75.2 million.

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The company said ratings for its "Raw is War" and "SmackDown!" programs increased in the last four weeks, and that its July pay-per-view program had 70 percent higher revenue than the same event a year ago. But it gave no any specific earnings guidance in its earnings statement. graphic


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