WMG Narrows Losses In Q3
August 07, 2008
| Global
By Andre Paine, London
Warner Music Group has released third-quarter earnings figures which show its losses narrowing and digital revenues continuing to grow.
WMG announced revenues of $848 million today (Aug. 7), an increase of 5% compared to the same quarter last year, but 1% down on a constant-currency basis.
The major made a net loss of $9 million or $0.06 per share for the third quarter, compared to a $17 million loss in Q3 in 2007. The losses were smaller than analysts’ estimates, while revenues exceeded expectations.
Digital revenue for the period was $166 million, representing 20% of total revenues. That value was a 1% rise on Q2 in 2008 and up 39% compared to the same quarter last year. It also represents 22.7% of WMG’s recorded music revenue, but the New York-based company says this was not enough to offset declines in physical sales.
“This quarter, we continued to outperform our competitors, even in the midst of a challenging recorded music environment,” says chairman and CEO Edgar Bronfam in a statement. “We continue to advance our strategy to lead the recorded music industry’s transition with new business models, key partnerships and successful A&R investments. As we transform the business to position it for future growth in an evolving industry, we remain focused on driving profitability and cash flow, while prudently managing capital and costs.”
Revenue from recorded music increased 5.1% from the prior-year quarter to $686 million, down 1% on a constant currency basis. However, there was a fall of 7.5% in U.S. recorded music revenue to $319 million, while revenues outside the U.S. increased 19.2% to $367 million. The company says major sellers included Madonna, Disturbed, Plies, Luis Miguel and Frank Sinatra.
Music publishing revenue was flat domestically but an 11.1% increase in revenues from international markets ensured a 7% overall increase from the previous Q3 to $168 million. WMG says that was achieved despite a 14.3% decline in mechanical rights revenues compared to the same period last year, reflecting the decline in physical record sales.
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