Warner Music Group Corp., one of the nation's largest record companies, on Tuesday posted a loss in the fourth quarter as severance costs weighed on results despite a strong slate of music releases from artists including Jay-Z and Madonna.
Sales of digital copies of music grew faster than CD sales, and international sales far outpaced domestic business. But Warner, based in New York, said strong music releases were dampened by weak economic conditions and an industry shift from CD to digital music sales.
Warner Music had loss of $18 million, or 12 cents per share, compared with net income of $6 million, or 4 cents per share. The quarter included $14 million in severance costs.
Revenue rose by nearly 1 percent to $861 million, from $854 million. Excluding the effects of foreign exchange translation, revenue would have risen by 4.7 percent.
Analysts expected a profit of 5 cents per share in the quarter on revenue of $820.3 million, on average, according to Thomson Reuters. Analysts typically exclude one-time items.
In the quarter, U.S. sales fell by 7.4 percent while international sales rose by 8.8 percent, or 17.8 percent, excluding the impact of foreign currency fluctuations.
Digital revenue was up 10 percent to $184 million, or 11.5 percent, on a constant currency basis.
Big sellers in the quarter also included Michael Buble, Muse and Paramore, as well as Japanese artists Ayaka, Kobukuro and Superfly.
For the year, Warner reported a loss of $100 million, or 67 cents per share, compared with a loss of $56 million, or 38 cents. Revenue fell 9 percent to $3.18 billion.
Copyright 2009 AP News
