Record label Warner Music Group Corp. (WMG), Tuesday, reported a loss for the first quarter, compared to a profit in the corresponding quarter last year, despite a 3.5% growth in revenues. The prior-year quarter had a gain related to the sale of the company's investment in Front Line Management.
The New York-based company reported an attributable net loss of $17 million or $0.11 per share for the quarter, compared to attributable net income of $23 million or $0.15 per share last year. The prior-year quarter included a gain of $36 million, or $0.24 per share, related to the sale of the company's investment in Front Line Management.
On an average, eight analysts polled by Thomson Reuters expected Warner Music to report a first-quarter loss of $0.14 per share. Analysts' estimates typically exclude special items.
Net revenues for the quarter grew 3.5% to $918 million from $887 million last year, better than the Street estimate of $872.28 million. Revenues declined 2.0% on a constant-currency basis.
Segment-wise, revenues from recorded music improved 3.4% to $783 million from $757 million, and sales from music publishing segment increased 4.4% to $141 million from $135 million during the period.
While international revenue from recorded music rose 12.7% to $498 million, revenues from the US declined to $285 million from $315 million. The US results were tempered by continued general economic pressures and the transition from physical sales to digital sales in the recorded music industry, according to the company.
Operating margin improved by 0.5 percentage points to 5.1% during the period. As of December 31, 2009, the company had a net debt of $1.61 billion, with a cash balance of $339 million and total long-term debt of $1.94 billion, compared to net debt of $1.56 billion at September 30, 2009.
WMG shares are trading at $5.19, up $0.40 or 8.35% on the NYSE.
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