Originally published Tuesday, November 25, 2008 at 4:35 AM
Warner Music Group 4Q profit rises 20 percent
Warner Music Group Corp., whose artists include Linkin Park and Madonna, said Tuesday lower income tax expense and increased digital revenue drove its fiscal fourth-quarter profit up 20 percent to beat Wall Street expectations.
Warner Music Group Corp., whose artists include Linkin Park and Madonna, said Tuesday lower income tax expense and increased digital revenue drove its fiscal fourth-quarter profit up 20 percent to beat Wall Street expectations.
For the three months ended Sept. 30, earnings climbed to $6 million, or 4 cents per share, from $5 million, or 3 cents per share. Income tax expense was nearly halved to $13 million.
Revenue slipped 1 percent to $854 million from $867 million as consumers shifted toward digital music and digital piracy continued. The company's own digital sales, which make up 20 percent of total revenue, grew to $167 million from $131 million.
The results easily beat the average estimates of analysts polled by Thomson Reuters, who had predicted a loss of 2 cents per share on sales of $837.6 million. Analysts' estimates typically exclude one-time items.
Recorded music revenue dropped nearly 4 percent to $707 million, while the unit's digital revenue increased 26 percent to $156 million. Best sellers included releases from artists such as Metallica, Kid Rock, T.I. and Mariya Takeuchi.
For Warner's music publishing division, revenue climbed 14 percent to $156 million as digital revenue surged 57 percent to $11 million.
Warner reported a full-year loss of $56 million, or 38 cents per share, compared with a loss of $21 million, or 14 cents per share, in the prior year. Losses from continuing operations totaled $35 million, or 24 cents per share, compared with a year-ago loss of $8 million, or 5 cents per share.
Annual sales increased 3 percent to $3.49 billion from $3.38 billion.
Looking ahead, Chief Financial Officer Steve Macri cautioned that worldwide economic volatility and the timing of Warner's release schedule "may result in back-end weighted fiscal 2009 results."
Copyright © 2008 The Seattle Times Company
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