Warner Music Revenue Down Slightly In Fiscal Q1
February 14, 2013

Warner Music Group has released its results for the company's fiscal first quarter, which ended December 31, 2012. For the quarter, revenue fell by 0.8 percent to $769 million, down from $775 million a year earlier. However, revenue grew 0.3 percent in constant currency. Digital revenue was up 16 percent from $219 million to $255 million. Operating income grew by 31 percent to $51 million.

WMG notes that "Despite a difficult year-over-year comparison resulting from strong physical sales of Michael Bublé’s Christmas in the prior-year quarter, the company’s stable revenue results reflect solid digital revenue growth in both Recorded Music and Music Publishing, as well as growth in Recorded Music licensing revenue, offset by a decline in physical sales and non-digital Music Publishing revenue." Additionally, digital revenue represented 33.2 percent of total revenue for the quarter, compared to 28.3 percent a year ago. 

WMG took an $80 million net loss in the quarter, which reflects the impact of an $83 million loss on the extinguishment of debt in connection with the company’s November 2012 refinancing of certain indebtedness.

Recorded music revenue was essentially flat in the quarter, at $657 million, with digital revenue up 16 percent to $237 million. Top sellers in Q1 included Led Zeppelin, Bruno Mars, Michael Bublé, Johnny Hallyday and the Génération Goldman tribute album. On the publishing side, revenue fell four percent to $116 million while digital revenue grew 27 percent to $19 million.

"We are pleased with the start we’ve had to our fiscal year," said WMG CEO Stephen Cooper. "We continue to make progress throughout our organization, while maintaining our focus on long-term artist development, innovation and growth and carefully managing costs."
 
"Digital revenue, OIBDA and OIBDA margin all showed solid growth," added EVP/CFO Brian Roberts. "Even with $132 million in cash outflows in the quarter associated with our refinancing, we had $189 million of cash on our balance sheet as of December 31, 2012."




 
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Jon Zellner
SVPP, iHeartMedia

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