Mixed notes for EMI's fiscal Q1
Sad song for recorded music, but digital sales upbeatMusic major EMI Group Plc. reported mixed revenue trends for its fiscal first quarter as total revenue trended down driven by recorded music declines, while digital music sales looked better.
EMI said financial momentum for the three-month period starting April 1 was "in line with its expectations."
The company, which said last week that its acquisition by private-equity firm Terra Firma has become unconditional, added that early revenue indications from its launch of DRM-free online music offerings on Apple Inc.'s iTunes in late May are "encouraging."
EMI said total revenue at constant currency declined 5.1% in its fiscal first quarter year-over-year, "reflecting the tough market conditions experienced in the recorded music market."
Indeed, revenue at its recorded music division, EMI Music, fell 13.4% assuming constant currencies because of a sluggish market and the firm's light release schedule in the latest period. A new album from Joss Stone (pictured) was launched just before the start of the fiscal first quarter, but EMI didn't list any of its releases as key performers.
Digital recorded music revenue increased 26% in the early going of EMI's new fiscal year, while physical revenue declined 19.8% in the opening quarter.
Quarterly revenue for the EMI Music Publishing unit at constant currency increased 11.9%. This partly was a result of litigation settlements, though the company also said "mechanical revenues are holding up well in the face of significant declines in the recorded music markets, and synchronization revenues have had a strong start to the year." Digital music publishing revenue increased 13.2% in the fiscal first quarter, while physical revenue rose 11.9%.
EMI said the cost savings from previously unveiled restructuring programs are coming in on target so far.
Terra Firma succeeded in its £2.4 billion takeover of EMI once Warner Music Group formally dropped out of the running.
The private-equity firm, however, hasn't yet bought out all shareholders. In London, EMI shares closed down 0.2% on Monday at £2.63 ($5.34).
WMG reports its latest quarterly financials today. The stock closed up 0.3% on Monday at $11.03, close to its 52-week low of $10.48.
The company's Warner/Chappell music publishing arm said Monday that it has purchased Non-Stop Music for an undisclosed amount.