Warner Music Group’s profit nearly doubled last quarter … The company reported FY1Q06 net income of $69 million up 92 percent compared to $36 million in FY1Q06 — despite a 4-percent decline in overall revenue to $1.04 billion. Earnings per diluted share were up 47 percent, to 46 cents per share from 31 cents per share year over year. (Thomson First Call analysts were expecteing 40 cents per share.) Digital music revenue continues to grow as does its importance to WMG, where it now represents 7 percent of revenue. revenue of $69 million was up 30 percent sequentially from the previous quarter and 176 percent from FY1Q05. Digital revenue of $5 million in music publishing was 4 percent of that segment’s revenue.
Anthony Noto, Goldman Sachs (via TheStreet.com): “We see 15% appreciation in the shares of Warner Music Group and our thesis remains unchanged in that we see WMG as an investment in existing content that can be further monetized through new formats and new distribution channels. Additionally, each incremental dollar of revenue in these new formats will likely be more profitable given digital music’s better margin contribution.”
Earnings release | Webcast (archived)
You can download the webcast audio here (53 min., 9.5 MB).
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