Live Nation reported a slim but unexpected 2 cents per share profit despite a lower net income in the second quarter than the same period a year ago, as the company released its financials for the second quarter of 2008 in an earnings call August 7.
Net income fell to $1.2 million, or 2 cents per share, from Q2 2007’s $9.9 million, or 15 cents per share. However, revenue rose to $1.16 billion from $986.3 million.
Much of the dip in net earnings was because of Live Nation’s cost in building its own ticketing service, which LN President/CEO Michael Rapino said is expected to launch January 1.
The results exceeded Wall Street’s expectations. Analysts had generally predicted LN would post a net loss of 15 cents per share on revenues of $1.05 billion, according to Reuters.
"The concert environment remains strong and the fundamentals of our core business continue to improve," Rapino said in a statement. "We have two priorities in 2008 – to continue to grow our concert business and to prepare to vertically expand into the ticketing business.
"Our core business is buying and producing concert rights and monetizing the live experience through our distribution pipe. We were successful in growing both."
A set of key metrics was included in the report, showing substantial increases in total concert attendance, ancillary revenue per amphitheatre attendee and total revenue per attendee.
Estimated attendance is up more than 1.5 million, or 13.8 percent, from Q2 2007, from 12 million to 13.66 million. The ancillary revenue from each amphitheatre concertgoer averaged $17.46, up from $17. And total revenue realized per fan at all shows averaged $82.18, up 6 percent from $77.51 in 2007.
Rapino characterized ticket sales in the second quarter as "robust" and said during the earnings call that he expects Q3 to be as strong, despite fears inside the industry and out that sharply increased fuel and food prices plus a looming recession would take their toll in the fall.
"Regarding the third quarter, it’s already August and July is in the books," Rapino said confidently. "We believe Q3 will finish as strong as Q2 in per-head and ticket sales. We’re confident we’ll stay on plan."
Rapino cited a strong fall concert schedule, with Madonna’s tour leading the way with more than 1.3 million tickets, or 83 percent of the allotment, already sold. Rapino predicted a $240 million potential gross on the Madonna tour, and added that Coldplay has sold out 90 percent of its tour so far.