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WWF sees profit slump
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September 27, 2000: 5:55 p.m. ET
Wrestling icon says 2Q, 3Q results bruised by advertising, licensing slump
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NEW YORK (CNNfn) - Punished by slowing advertising and licensing revenues, World Wrestling Federation Entertainment Inc. on Wednesday said it has trimmed its earnings estimates for the current fiscal year.
The Stamford, Conn.-based WWF, known for its television programs and live events, and home to such wrestling stars as The Rock and "Stone Cold" Steve Austin, warned that its earnings before interest, taxes, depreciation and amortization, also called EBITDA, will be 8-to-10 percent lower than the prior company estimates.
 Wall Street analysts commonly track EBITDA, or cash flow, as a barometer of the health of media companies. According to First Call, analysts had been expecting WWF to report a second-quarter profit of 20 cents a share, a third-quarter profit of 22 cents, and 19 cent per share in the fourth quarter.
WWF (WWFE: Research, Estimates) said that for the period ending April 30, 2001, annual revenue from core businesses is anticipated to be approximately 3 percent below prior estimates.
The company expects its results to be bruised modestly in its second quarter, while the majority of the fiscal pain will be felt in the third quarter. The fourth quarter is consistent with prior projections, WWF said.
Licensing program blamed; TV still strong
WWF also notes that estimates for its new football league, the XFL, are tracking in line with prior estimates.
"We did not effectively manage our licensing program," said Linda McMahon, Chief Executive of WWFE, in a statement, "While we negotiated good deals, introduced great products in the marketplace, we failed to provide the retail marketing support and monitoring that was needed."
McMahon blamed the anticipated licensing revenue shortfall on slower than expected sales of older toy products as well as a drop in the estimated revenues from its association with the National Hot Rod Association (NHRA), due to "management issues," with which is has already dealt.
She added that in other areas of its licensing businesses, such as video games, sales remain strong.
In addition, the company still expects to report muscular result from its Live and Televised businesses. Live Events revenue continues to rise due to increased ticket prices and strong attendance. Pay-per-view revenue is tracking ahead of expectations, and the company anticipates that it will exceed its record 6.8 million pay-per-view buys recorded in fiscal 2000, thus retaining its status as the No. 1 pay-per-view provider in the world.
The news was released after the close of the regular trading session. WWF shares ended the day at $19.50, off 50 cents a share. 
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WWF Entertainment
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