Warner Music Group Posts Net Loss

WMG posted a $23 million profit in the same quarter of 2008.

Revenue grew 3.5% to $918 million from $887 million in the same quarter the previous year but declined 2% with exchange rates factored in.

Operating income grew 14.6% to $47 million from $41 million a year earlier.

The company said: “This performance primarily reflected strong international results, while U.S. results were tempered by continued general economic pressures and the transition from physical sales to digital sales in the recorded music industry."

Revenue from recorded music increased 3.4% (down 2.2% on a constant currency basis), with WMG citing weakness in the U.S., Japan and parts of Europe and gains in the U.K., France and Italy. International recorded music revenue grew 12.7% to $498 million. Top titles included albums by Michael Buble, Enya and Muse and several soundtracks (including “The Twilight Saga: New Moon").

WMG exec VP-chief financial officer Steven Macri said he expected the company's release schedule for the 2010 fiscal year to be “backend weighted."

Digital revenue of $184 million represented 20% of total revenue, up 5% from the same quarter in 2008. Revenue from music publishing climbed 4.4% to $141 million (but was flat on a constant-currency basis).

WMG chairman-chief exec Edgar Bronfman Jr. said, “Our goals remain focused on delivering strong returns on A&R investments while we develop new business models, diversify our revenue mix and fortify our digital leadership position."

According to 2009 year-end figures from Nielsen SoundScan, WMG ranked third among the four major music companies last year, with 20.55% of total album sales. Last year, overall album sales declined 12.7%.