WWE is scheduled to report 2011 fourth quarter earnings today and it isn’t good news. The company is expected to report a loss of $8.6 million (12 cents per diluted share) driven by higher costs. In comparison, the company had a net income of $8.1 million or 11 cents per share in the fourth quarter of 2010. Total revenue fell 7.8% to $112.9 million from the year-earlier quarter. This is short of the average revenue estimate of $120 million.
“In 2011, we evaluated several paths for creating new programs and distributing all of our content in a way that optimizes its value. Executing this strategy effectively, including the potential creation of a WWE Network, has the power to transform our business,” stated Vince McMahon, Chairman and Chief Executive Officer. “While we made significant progress toward this objective, our fourth quarter and full year results were impacted primarily by three items: significant non-cash film impairment charges stemming from the weak performance of our movie releases, strategic decisions to withhold several hours of previously licensed television content for distribution on other platforms, and initial start-up operating expenses associated with our emerging content and distribution strategy. Regarding the first item, we have taken several measures to improve the profitability of our movie business. And, regarding the other items, we believe that our ongoing investment to expand and maximize the value of our content is the most potent approach for driving our future earnings.”
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WWE will issue a press release detailing earnings later today and will host a conference call at 11 AM EST with investors.