LN Narrows Margins

Live Nation reported an increase in revenues of 25.7 percent, or $754.7 million, for the year ended December 31st but it wasn’t enough to prevent a net loss – albeit a smaller one than that of the previous year – the company announced March 1st.

Net income increased by $99.2 million over 2005, to a reduced loss from the previous year of $31.4 million, and earnings per share increased by $1.48 to a reduced loss per share of 48 cents.

Excluding major acquisitions including Concert Productions International, TRUNK Ltd., Musictoday and House of Blues Entertainment, and the divestiture of its exhibition and sports representation business, LN estimates revenue for the full year would have been $3.37 billion, for a net increase of $493.3 million or 17.1 percent more than estimated 2005 revenue of $2.88 billion.

The increase in revenue, according to a Live Nation statement, was primarily because of the increase in the number of events and global attendance figures. The decline in estimated Adjusted EBITDA was primarily because of increased corporate costs associated with the spin-off from Clear Channel Communications and investment in its venue management group and online businesses.

For the fourth quarter of 2006, LN reports revenues of $1.05 billion for an increase of $299.7 million, or 39.8 percent, compared with the same time a year ago. Adjusted EBITDA increased by $14.8 million to $18 million, operating income increased by $45.7 million for a reduced loss of $17 million, and net income increased by $101.8 million for a reduced loss of $33.1 million.

"We began 2006 as a broad-based live entertainment company with a vision to transform ourselves into a global, vertically integrated live music company," Live Nation CEO Michael Rapino said in a statement. Noting acquisitions, divestiture of non-core businesses and streamlining efforts made by the company in 2006, he added, "Now, at the beginning of 2007, I can say we are focused on live music with the tools to execute on our strategy … connecting artists and fans through the live concert experience."

The report acknowledged continued challenges including North American amphitheatres, underexposure to small and mid-sized venues and top population centers, artist talent costs, ancillary services for fans, decentralized management, and limited brand recognition and Web presence.