Warner Music Group said December 1st it swung to a profit in the fourth quarter, boosted by a $13 million settlement with file-sharing Web site Kazaa, but still fell short of Wall Street predictions.
The New York-based recording company said net income totaled $12 million for the three months ending September 30th, compared with a loss of $30 million, or 21 cents per share, a year ago.
Not including the copyright infringement settlement with Kazaa, the loss totaled a penny per share.
Warner saw revenue fall 6 percent during the quarter to $854 million from $905 million last year.
The company said the quarter’s results were hampered by ongoing challenges in the industry and unreasonably high expectations when compared to last year’s results, which included releases from
Domestic recorded music revenue fell 10 percent during the quarter; international revenue was flat compared to last year.
Revenue from music publishing fell 9 percent to $128 million.
Digital revenues for the quarter were $104 million – 12.2 percent of total revenue, with about 70 percent of digital revenue generated in the U.S., the company said.
Industrywide U.S. album sales – in digital and physical formats – fell 7 percent during the quarter, according to Nielsen SoundScan.
Warner Group CEO Edgar Bronfman Jr. said gains in digital recorded music revenue “more than offset declines in physical recorded music revenue,” and that Warner gained margin and market share during the quarter.