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WWE touts Network-driven earnings growth in Q4 Financials

WWE's roller coaster 2015 continued this morning with the release of their fourth quarter financial reporting, and the WWE Network is again the source of good news amid issues with Creative direction and public relations.

Overall revenues were up 19% to $140.5 million, largely due to North American increases driven by subscription fees for the fledgling over-the-top streaming service.  Revenue in WWE's home market increased 23% ($19.8 million), with much of that growth coming from the Media Division, where a larger Network subscriber base and increased broadcast rights fees resulted in a ten year peak in segment revenues,

WWE Network added 85,000 subscribers from October - December of 2014, reaching 816,000 by year end.  That number consisted of 336,000 new sign-ups - up 17% in gross subscriber additions from Q3.  The free trial in November was credited with contributing to the growth, with 242,000 people signing up in the month.

International growth is slow, but the company is promoting that the service is now in 170 countries and had 44,000 subscribers by December 31st.  Canadian, Middle Eastern and North African markets are being targeted for expansion.

Overall customer satisfaction metrics remain good; close to 90% accessed the service once per week and 90% are satisfied with the Network.  The report highlights live programming like NXT and The Stone Cold Podcast as being key to future growth and mentions plans for more interview, talk show, animation and short form content to be added for streaming.

Pay-per-view (PPV) revenue was obviously down as a result of the new strategy - 62% to be exact, but there were some positives there, including 100,000 buys for Survivor Series while it was free on the Network.  WWE Studios continues to be a loser, costing the company $400,000 after adjustments in the quarter.

Live event revenue was up slightly to $26.9 million. This was attributed to increase dates and slightly better average attendance numbers.  Consumer products, consisting of live and merchandise sales were up 23%, largely due to a record breaking holiday season on the web site.

This all still adds up to a net loss for the quarter, but the Network growth is paying off and making the performance much better than the recent past ($1.6 million or $.02 per share compared to $7.9 million and $.10 per share in the prior year quarter).  WWE Chairman McMahon is quoted in the report:

In the fourth quarter, we continued to execute our WWE Network strategy, and we generated earnings growth driven by the escalation of our television rights fees. For the quarter, our adjusted OIBDA surpassed our most recent public guidance associated with an average of 721,000 paid subscribers.

The results are better than many Wall Street estimates (Capital IQ Consensus had predicted an $.08 per share loss) and, in early trading, the company's stock price is up slightly, trading at around $14 as of this writing.

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