WWE stocks tumble despite 40 percent revenue gain

Imagine if WWE had produced a bad first quarter.

Vince McMahon’s entertainment company saw its shares tumble 6.6 percent Thursday — even after the company reported a 40 percent revenue gain and a 63 percent increase in subscribers to its WWE Network.

Even earnings per share blew past Wall Street’s first-quarter estimate, coming in at 13 cents a share, well above the anticipated 1-cent profit.

And while the overall market had a tough session Thursday, WWE’s stock slide, to $13.42 a share, was inexplicably worse than the 1.1 percent hit taken by the S&P 500.

Perhaps the 927,000 average paid subscriber level for the WWE Network spooked Wall Street.

On a conference call with Wall Street analysts on Thursday, the Stamford, Conn., company said WWE Network subscriber levels in the second quarter could grow to as much as 1.3 million.

“Unfortunately, the WWE has become a name many trade on during announcements and certain big events, rather than invest in long term, [and the long term] is the right way to view the name and the franchises they have,” said Robert Routh, an analyst with FBN Securities.

WWE Network’s 1.3 million subscribers at the end of the quarter racked up 53.3 viewing hours per household, the company said.

That compares to 167.1 hours for Netflix and 36.3 hours for HBO.

The quarter was also WWE’s most profitable in three years, with net income swinging to $9.8 million from an $8 million loss in the year-earlier quarter.

WWE CEO McMahon left no doubt he believes even better days lie ahead, claiming the company is “on a path to significant growth as we continue to expand WWE Network and innovate faster than ever.”