WMG Q4 Profit Declines
November 29, 2007 at 5:47 AM (PT)
WARNER MUSIC GROUP has reported its fourth-quarter profit fell 58% due to a challenging recorded music environment, but the results topped analyst estimates. Earnings for the quarter ended SEPT. 30th slipped to $5 million, or 3 cents per share, from $12 million, or 8 cents per share in the prior year.
Quarterly results included $9 million in restructuring and implementation expenses and a $12 million benefit for a settlement with BERTELSMANN AG related to NAPSTER. The prior-year period included a $13 million gain on a KAZAA online music sharing settlement.
As expected, this has been a challenging quarter, reflecting the difficulties in any industry transformation of this scale.
Quarterly revenue climbed 2% to $869 million from $854 million in the year-ago period.
Analysts polled by THOMSON FINANCIAL expected net income of 2 cents per share on sales of $874.8 million.
WARNER MUSIC GROUP is one of many recording companies that have struggled to keep pace with the music industry, as consumers continue to turn away from CD purchases for online music. Recorded music revenue edged up 0.7% to $736 million, while music publishing revenue rose 7% to $137 million.
"As expected, this has been a challenging quarter, reflecting the difficulties in any industry transformation of this scale. But we remain confident for two primary reasons: continued growth in the broader music market that our long-term strategy targets, and the disciplined creative leadership shown by WMG to expand our music business model," said WMG Chairman/CEO EDGAR BRONFMAN JR.