While not as bad as some analysts had expected, there was not much to smile about in Burbank as Warner Music Group filed its 1Q report with Wall Street this morning. For the quarter ending Dec. 31, WMG posted a loss of $18 million or 12 cents a share on $789 million in revenue, compared with a loss of $17 million or 11 cents a share a year earlier. Analysts polled by Thomson Reuters had forecast a loss of 19 cents on $798 million in revenue.
Digital Grows, But So Do Severance Packages:
Digital music sales grew just 2% for the quarter and now make up 37% of U.S. recorded music revenue and 24% internationally. That's up 3.7% overall from a year ago. But combined revenue from the recorded music division dropped 14%, and from the usally music publishing revenue fell 15% .
Severance packages to departing staff in the record division also continue to be a drain WMG's earnings. Q1 alone saw $11 million dedicated to severance up from $5 million in the prior year quarter.
WMG stock had been up 30% this year on rumors of a sale and it's possible purchase of some EMI assets. While by no means dire, earnings reports like this may limit WMG's options going forward.
Digital Grows, But So Do Severance Packages:
Digital music sales grew just 2% for the quarter and now make up 37% of U.S. recorded music revenue and 24% internationally. That's up 3.7% overall from a year ago. But combined revenue from the recorded music division dropped 14%, and from the usally music publishing revenue fell 15% .
Severance packages to departing staff in the record division also continue to be a drain WMG's earnings. Q1 alone saw $11 million dedicated to severance up from $5 million in the prior year quarter.
WMG stock had been up 30% this year on rumors of a sale and it's possible purchase of some EMI assets. While by no means dire, earnings reports like this may limit WMG's options going forward.
