Warner Music Group's stock dips 4% after profit falls short of estimates
By Ciara Linnane
Revenue from recorded music rose 4%, while revenue from music publishing rose 19%
Warner Music Group Inc.'s stock fell 4% premarket Thursday after the company posted a weaker-than-expected first-quarter profit.
The company (WMG) had net income of $96 million, or 18 cents a share, for the quarter, up from $34 million, or 6 cents a share, in the year-earlier period. Revenue rose 7% to $1.494 billion from $1.399 billion a year ago.
The FactSet consensus was for EPS of 20 cents and revenue of $1.481 billion.
"This quarter we saw a healthy, dynamic mix of hits across a range of genres, geographies, and generations," CEO Robert Kyncl said in prepared remarks.
Revenue from recorded music rose 4% to $1.189 billion, while revenue from music publishing rose 19% to $306 million.
Digital revenue growth from recorded music was hurt by the end of a distribution agreement with BMG, which is fully owned by German publisher Bertelsmann. That resulted in $22 million less revenue than a year ago.
Recorded music streaming revenue was also hit by a renewal with a digital partner that led to upfront revenue recognition in the prior quarter. Excluding the termination of the BMG deal and license renewal, revenue was up 8.8%.
Read also: Warner Music to lay off 10% of workforce as part of restructuring plan
Digital revenue rose 9.9% and streaming revenue rose 10.7%. Recorded music streaming revenue rose 7.1% and was up 10.5%, adjusted for the BMG termination and license renewal.
The stock has fallen 0.4% in the year to date, while the S&P 500 has gained 8.8%.
-Ciara Linnane
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05-09-24 0819ET
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