WMG slips on weak industry sales
Music sales decline 11% in first half of 2008Warner Music Group's shares dropped on Monday after an analyst said an industry decline in music sales seems to have accelerated in the first half of 2008.
Its stock lost 46 cents, or 6.5%, to $6.63 in afternoon trading. The shares have traded between $4.57 and $15.71 during the past 52 weeks.
Wedbush Morgan Securities analyst Chris White maintained his "Hold" rating on the stock, but lowered its 12-month price target to $7 from $9.
White said Nielsen SoundScan data shows that total music sales, both physical and digital, have dropped 11% in the first half of the year, faster than its 9.5% decline in 2007.
The analyst said physical CD sales are down more than 16% year-to-date, on par with 2007, as dedicated music stores have closed and big-box stores have reduced shelf space for music.
He said the 34% jump in digital music sales is "impressive" but falls short of the growth rate reported by Warner Music in its last two quarters.