By Sabela Ojea

Warner Music Group reported a big drop in fiscal fourth-quarter profit as its topline performance continued to be hit by the termination of a distribution contract with BMG and a renewal with one of its digital partners.

The entertainment and record label conglomerate on Thursday posted net income for the three months ended Sept. 30 of $41 million, or 8 cents a share, compared with $152 million, or 17 cents a share, for the same period a year earlier.

Revenue rose 2.8% to $1.63 billion, beating the $1.59 billion expected by analysts, according to FactSet. Digital revenue fell 0.2%, with streaming revenue rising 1% and recorded music streaming revenue up 2.1%.

Recorded Music revenue was up 3.6%, driven by growth across licensing, digital, physical and artist services and expanded-rights revenue. However, the termination of the distribution agreement with BMG resulted in $25 million less revenue compared to the prior-year quarter, Warner Music said.

Warner Music's latest results come about two months after it said it planned to lay off more employees than it originally expected as part of a restructuring plan aimed at boosting its core recorded music business.

The company said it would reduce its workforce by about 750 employees, representing 13% of its total headcount. Warner Music had previously guided for a cut of 600 employees, or a 10% cut in the workforce.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

November 21, 2024 08:04 ET (13:04 GMT)

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