Warner Music swings to wider-than-expected loss but revenue beats estimates

Warner Music swings to wider-than-expected loss but revenue beats estimates

Warner Music Group Corp. shares
WMG,
+0.80%

rose 2.3% in premarket trade Tuesday, after the company swung to a bigger-than-expected loss for the second quarter in the midst of the pandemic, but revenue beat expectations. New York-based Warner Music is one of three large companies that dominate the recorded-music industry, and is the parent company for record labels including Atlantic Records, Warner Records and Elektra Records, and artists Ed Sheeran, Bruno Mars, Cardi B, Twenty One Pilots, Lizzo and Katy Perry. The company returned to public markets via an initial public offering in June. The company said it had a net loss of $519 million, or $1.03 a share, in the quarter, after income of $14 million, or 3 cents a share, in the year-earlier period. Revenue fell 5% to $1.010 billion from $1.058 billion. The FactSet consensus was for a loss of 2 cents a share and revenue of $980 million. Digital revenue rose 11% to $720 million and accounted for 71.3% of total revenue, up from 61.2% a year ago. “We’re very pleased with our performance this quarter, especially in light of the global pandemic,” Chief Executive Steve Cooper said in a statement. “Our results highlight the underlying strength and resilience of our business. Streaming revenue grew double digits and our digital transformation continues.” The company ended the quarter with cash of $532 million and debt of $3.0 billion. Shares have gained 2% in the month to date, while the S&P 500
SPX,
+0.64%

has gained 5%.

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