Warner Music Profit Drops 74 Percent On Falling Sales
February 8, 2007, 17 years ago
The following report is courtesy of Don Jeffrey from Bloomberg.com:
Warner Music Group Corp. said first- quarter profit and sales plunged more than analysts estimated as albums from JOSH GROBAN and MY CHEMICAL ROMANCE failed to match hits of a year earlier.
Net income dropped 74 percent to $18 million, or 12 cents a share, from $69 million, or 46 cents, a year earlier, New York- based Warner Music said today in a statement. That missed the 26 cent average estimate compiled by Bloomberg. Sales declined 11 percent to $928 million.
Sales of recorded music slid 13 percent as demand for new releases fell short of a year earlier, when Warner had albums from MADONNA, JAMES BLUNT and ENYA. Chief Executive Officer Edgar Bronfman Jr. made deals to boost more-profitable digital sales, which rose to $100 million, or 11 percent of revenue.
"They had a much better lineup last year,'' said Eric Handler, a Lehman Bros. analyst in New York, in an interview. He rates the shares "equal weight'' and doesn't own any. "Digital was strong, but physical is receding,'' he said.
Shares of Warner Music, the world's fourth-largest record company, fell $1.15, or 5.4 percent, to $20.36 at 9:52 a.m. in New York Stock Exchange composite trading. Before today, they had gained 2.5 percent in the past year.
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