Warner Music Loss Narrows Amid Improved Sales
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Warner Music Group Corp. (WMG) said Monday that a weak dollar and improved sales of digital music helped narrow its second-quarter loss.
Issuing its first quarterly report as a public firm, Warner Music, whose Elektra, Atlantic and Reprise record labels are home to artists such as Green Day (search), Linkin Park (search) and Madonna (search), posted a loss of $35 million, or 28 cents per share, compared with a $48 million deficit the year before. Per-share figures for last year's quarter were not provided.
Total revenue grew 4 percent to $767 million, with revenue from its recorded music unit rising 5 percent to $621 million. Segment results included an $18 million boost from favorable exchange rates and $31 million in digital sales that were offset by a $30 million drop in worldwide CD sales, the company said.
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Meanwhile, Warner Music's music publishing business saw revenue increase 3 percent to $154 million on greater performance royalties and $4 million in digital music sales.
The company added that its operating income amounted to $27 million, up from an operating loss of $21 million a year ago. Operating income before depreciation and amortization soared about 83 percent to $88 million, or $95 million excluding accounting charges.
Warner Music, which boasts other headlining acts like Kid Rock, Rob Thomas and Missy Elliott, was purchased last year by Edgar J. Bronfman Jr. (search) and a group of investors for $2.6 billion. Following the takeover, Bronfman led a major turnaround at Warner Music, consolidating labels, slashing artist rolls, ousting executives and laying off more than 1,000 workers.
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Until recently, Warner Music's stock traded as much as 12 percent below its initial public offering at $17 in early May. The deal priced well below estimates of $22 to $24 amid negative investor response and criticism from Linkin Park, the company's top musical act.