Profits Down, Digital Up: Warner Offers Familar Financial Story

Significant profit losses, significant digital gains.  That was the all-too-familiar financial song being sung by Warner Music Group during its recent quarterly earnings call.

For the three-month period ending December 31st, the major label lost $16 million, and operating income dropped 45 percent to $44 million.  Warner also suffered an $18 million loss related to its ill-fated acquisition of Bulldog Entertainment Group, a company that spearheaded a string of money-losing, Hamptons-based concerts.

Revenues actually improved during the period, along with digital sales.  Total revenues moved upward 7 percent to $989 million, though measured at constant currencies, the gain was just 1 percent.  Digital revenue reached $141 million, a 41 percent gain over year-ago tallies.  Digital assets now account for 14 percent of total label revenues.  Wall Street pushed shares of WMG southward to $6.94 in Wednesday trading, a near-21 percent drop.

Permalink: http://www.digitalmusicnews.com/stories/020608warner

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