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WWE Stock Takes Hit After Tough Earnings

Earnings were dented by the launch of its new WWE Network


Shares of World Wrestling Entertainment (WWE) tumbled more than 7% in Friday midday trading after the company reported a quarterly loss and negative second-quarter outlook.

WWE stockWWE stock sank on news that World Wrestling Entertainment had posted an $8 million loss during the first quarter, compared to a profit of $3 million in the prior-year period. Still, that was less than the quarterly loss of between $12 million and $15 million that the company had previously estimated.

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WWE attributed the loss to cost stemming from the launch of its new WWE Network, which garnered nearly 670,000 U.S. subscribers. WWE said it expects to hit 1 million subscribers by the end of the year.

More worrisome to investors, and likely driving WWE stock lower on Friday, the company said it anticipates a second quarter loss of between $15 million and $18 million.

WWE noted that profits from WrestleMania 30 would likely be “more than offset by increased Network costs, a seasonal decrease in Licensing and lower results from Home Entertainment (reflecting difficult comparisons to first quarter adjustments).”

On Thursday, WWE stock closed at $20.33 a share.

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Article printed from InvestorPlace Media, http://investorplace.com/2014/05/wwe-stock-takes-hit-tough-earnings/.

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