Warner Music Quarterly Loss Widens, Revenue Rises
UPDATED: The music major also reports an improved fiscal third-quarter operating profit as releases from Michael Buble, Bruno Mars and Paramore contributed to its results.
Warner Music Group on Thursday reported mixed fiscal third-quarter financials as underlying results improved, but its net loss widened.
The company, which Len Blavatnik's Access Industries acquired in 2011, cited the success of recorded music releases from the likes of Michael Buble, Bruno Mars and Paramore as boosting revenue.
"We recorded a solid quarter, having released several successful albums, and delivered strong performance from carry-over releases, while continuing to exercise financial discipline and to benefit from the outstanding execution of our operators," said CEO Stephen Cooper. "We are also very pleased that on July 1 we closed the acquisition of Parlophone Label Group, and we are now moving forward with our plans for Parlophone’s extraordinary artists, legendary catalog and talented team."
WMG's quarterly loss widened to $63 million driven by higher tax expense. In the year-ago period, the company had posted a loss of $32 million. On an operating basis, earnings rose from $7 million to $8 million.
Operating income before depreciation and amortization, another profitability metric, increased 5 percent to $69 million.
Fiscal third-quarter revenue of $663 million was up 1.8 percent, or 3.6 percent assuming constant currencies, compared with the year-ago period.
Recorded music revenue rose 3.3 percent, or 5.3 percent on a constant currency basis, while music publishing revenue dropped 2.9 percent, or 2.2 percent assuming constant currencies.
Total digital revenue grew 11.7 percent to $257 million and represented 38.8 percent of total revenue, compared to 35.3 percent in the prior-year period.
During a conference call, management reiterated that it was confident in its ability to integrate Parlophone and said it would continue to look for possible further acquisitions.