MUMBAI: WWE has reported second-quarter revenue of $142.6 million, compared with $106.8 million in the prior year quarter.

Operating income stood at $21 million from $10.3 million a year ago.

Net income was $14.3 million as compared to $6.3 million in the prior year quarter. There were several items that impacted the comparability of the year-over-year results, primarily the timing of WrestleMania and a $3.3 million film impairment charge in the current year quarter.
 
WWE chairman and CEO Vince McMahon said, "Through the second quarter, WWE has generated top-line growth across our four business segments led by the strength of WrestleMania. WrestleMania XXVII achieved more than 1 million pay-per-view buys worldwide and reached record levels of both revenue and profit. Our earnings, however, were constrained by the performance of our movie business, adverse home video sales trends, and the status of our talent development."

Key operating metrics, such as average live event attendance and pay-per-view buys showed declines in the second quarter when evaluated on a comparable basis to last year (excluding WrestleMania). But, while the company‘s key metrics were down, the gap to the prior year performance continued to diminish.

"As we continue to evaluate the potential of different forms of distribution, such as a WWE Network, we are more confident than ever that we can create and monetize content in a variety of existing and new media, and thereby create meaningful incremental value for our shareholders," McMahon.

WrestleMania XXVII occurred on 3 April 2011 and contributed $35.9 million of revenues, $16.7 million of profit contribution ($11.4 million, net of tax) and $0.15 of EPS from across various business lines to the current year second quarter results. In conjunction with the promotion of this event, $1.4 million in marketing expenses were recognised in the first quarter of 2011.

WrestleMania XXVI occurred on 28 March 2010 and contributed $28.8 million of revenues, $13.1 million of profit contribution ($8.8 million, net of tax) and $0.12 of EPS to the first quarter of 2010 results.

Revenues from the US and outside the US increased by 46 and nine per cent respectively, led by increases in the Live and Televised Entertainment segment.

Adjusted revenues rose seven per cent in the US, driven by $7 million in increased revenue from WrestleMania, and were essentially flat outside North America. Revenue in the current year quarter included an approximate $1.9 million favourable impact from foreign exchange rates.

Revenues from the Live and Televised Entertainment businesses were $110.5 million for the current year quarter as compared to $77.4 million in the prior year quarter, primarily reflecting the timing of WrestleMania. Adjusted segment revenues (including the impact of WrestleMania XXVI in the prior year quarter) increased approximately by four per cent from $105.9 million, driven by $6.4 million in incremental live event and pay-per-view revenue from WrestleMania.

Live Event revenues were $35.2 million as compared to $29.2 million in the prior year quarter, primarily due to the timing of WrestleMania XXVII. Adjusted revenues decreased 2% from $35.9 million reflecting a $1.9 million decline in live event revenue from non-WrestleMania events, partially offset by increased ticket revenue from WrestleMania.

There were 87 total events, including 30 international events, during the current year quarter as compared to 90 events, including 28 international events, in the prior year quarter primarily due to the timing and logistics of the event touring schedule.

North American events generated revenues of $20.6 million from 57 events as compared to $14.3 million from 62 events in the prior year quarter. North American average attendance increased by 14 per cent to approximately 6,600 from 5,800 in the prior year quarter.

International events generated approximately $14.6 million of revenues from 30 events as compared to $14.9 million from 28 events in the prior year quarter.

Pay-per-view revenues were $34.4 million as compared to $10.4 million in the prior year quarter. There were four pay-per-view events produced in the current year quarter as compared to three events in the prior year quarter.

Adjusted revenues (including the impact of WrestleMania XXVI in the prior year quarter) increased by approximately 17 per cent, or $5 million, driven by $5.2 million in incremental revenue from WrestleMania.

For the non-WrestleMania events, revenues were essentially flat to the prior year quarter. Overall, current period buys for these events were essentially flat to the prior year quarter as a domestic decline of nine per cent was offset by increased buys from outside North America.

Television rights fees revenues were $32 million as compared to $30.8 million in the prior year quarter. This increase was primarily due to improved terms and contractual increases from existing programmes, partially offset by the absence of rights fee for the NXT and WWE Superstars programmes.

Venue merchandise revenues were $6.3 million as compared to $4.3 million in the prior year quarter, primarily due to the timing of WrestleMania.Adjusted revenues (including the impact of WrestleMania XXVI in the prior year quarter) increased approximately $0.4 million from $5.9 million, driven by incremental revenue from WrestleMania.

Revenues from the consumer products businesses decreased by seven per cent to $21.6 million from $23.3 million in the prior year quarter, primarily due to a decline in home video sales, partially offset by growth in our Licensing business. Home video net revenues were $7.5 million as compared to $11.5 million in the prior year quarter, primarily reflecting an 11 per cent decrease in shipments to 917,000 units including the impact of one fewer release in the current year quarter, and lower sell-through rates. In addition, average effective unit prices fell by six per cent to approximately $12.50, reflecting the impact of ongoing discounts and promotional activity.

Licensing revenues were $12 million as compared to $8.7 million in the prior year quarter, primarily due to video game products. Revenues from this product category increased by approximately $4.2 million, led by the launch of the new video game, WWE All Stars.

Magazine publishing net revenues were $1.6 million as compared to $2.5 million in the prior year quarter, reflecting lower newsstand sales in the current year quarter.

Revenues from the digital media related businesses were $6.2 million as compared to $5.4 million in the prior year quarter, representing a 15 per cent increase. Adjusted revenues (including the impact of WrestleMania XXVI in the prior year quarter) increased approximately 9 per cent from $5.7 million driven by increased sales of merchandise on our e-commerce website, WWEShop.

WWE.com revenues were $3.4 million as compared to $3.0 million in the prior year quarter, primarily reflecting increases in pay-per-view webcast and advertising revenues. Adjusted revenues (including the impact of WrestleMania XXVI in the prior year quarter) remained essentially flat to prior year quarter.

WWEShop revenues were $2.8 million as compared to $2.4 million in the prior year quarter. The number of orders increased by 26 per cent to approximately 59,000, partially offset by an 8 per cent decline in the average revenue per order to $46.71.

During the quarter, WWE Studios had revenue of $4.3 million as compared to $0.7 million in the prior year quarter, with the growth in revenue driven by the release of the film, ‘That‘s What I Am‘. Revised ultimate projections for this film, which reflect lower actual home video sales than anticipated, resulted in a $3.3 million impairment charge.

The growth in revenue also reflected receipts from the film ‘12 Rounds‘. Film profits declined $3.7 million from the prior year quarter driven by the aforementioned impairment charge and the previously disclosed change in the distribution model for films. Under its self distribution model, WWE records a film‘s advertising costs and distribution expenses in the results as incurred.