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)
Copyright (c) 2024 Dow Jones & Company, Inc.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.