Warner Music Group Revenues Drop 15.7% In Third Quarter
August 5, 2010 at 4:24 AM (PT)
WARNER MUSIC GROUP has announced its Q3 financial results for the period ended JUNE 30th, 2010. For the quarter, revenue declined 15.7% to $652 million from $773 million in the prior-year quarter, and was down 15.3% on a constant-currency basis. This performance, wrote WMG "is due to a light release schedule. In addition, our revenue results continue to reflect the transition from physical to digital in the recorded music industry where increases in digital revenue have not yet fully offset the declines in physical revenue."
"We remain committed to bringing to market the highest-quality music when it is best-positioned to succeed artistically and commercially," said Chairman/CEO EDGAR BRONFMAN, JR. "Despite our anticipated very light release schedule, this quarter we grew digital revenue to 41% of our U.S. Recorded Music revenue, maintained U.S. album market share at 21%, continued to sign and develop some of the industry's most promising talent to expanded-rights agreements and invested further in the artist services business -- all consistent with our strategy to build a diversified music company positioned for long-term success."
"We remain focused on actively managing costs and generating significant free cash flow," added EVP/CFO STEVEN MACRI. "Our cost-management initiatives are largely designed to help mitigate the effects of the recorded music industry transition."
International revenue fell 19.2%, or 18.7% on a constant-currency basis, while domestic revenue declined 10.9%.
Digital revenue of $179 million grew 2.3% over the prior-year quarter, or 1.1% on a constant-currency basis.
As of JUNE 30th, the company reported a cash balance of $400 million, total long-term debt of $1.94 billion and net debt (total long-term debt minus cash) of $1.54 billion.
Revenue from the company's Recorded Music business declined 17.9% from the prior-year quarter to $519 million on an as-reported and constant-currency basis. The decline in constant-currency revenue "reflected weakness in the U.S., JAPAN and most of EUROPE, partially offset by strength in the U.K. and LATIN AMERICA," reported WMG.
Music Publishing revenue declined 6.1% from the prior-year quarter to $139 million, and was down 4.1% on a constant-currency basis. Domestic Music Publishing revenue was flat at $54 million, while international Music Publishing revenue declined 9.6% from the prior-year quarter and fell 6.6% on a constant-currency basis, to $85 million.