WMG Posts Unexpected Loss

Record company Warner Music Group Corp. said Wednesday that its fiscal 2010 fourth-quarter loss widened on a large severance charge and lower revenue reflecting the continued shift from CD sales to digital music.
The company lost $46 million, or 31 cents per share, compared with a loss of $18 million, or 12 cents per share, during the same period a year prior. Revenue fell 13 percent to $752 million from $867 million. The fourth quarter ended Sept. 30.
The company said it booked a severance charge that hurt earnings by 23 cents per share in the quarter, compared to 9 cents a year ago. Excluding the charge, the adjusted loss came to 8 cents per share.
Analysts surveyed by Thomson Reuters expected a loss of 13 cents per share on $731.7 million in revenue.
“The company’s revenue results continue to reflect the transition from physical to digital in the recorded music industry where increases in digital revenue have not yet fully offset the declines in physical revenue,” the company said in a statement.
Revenue from recorded music fell 13.3 percent to $619.9 million during the quarter, with the U.S., Japan, and most of Europe the weakest markets. But digital revenue from the sector rose 7 percent to $183 million.
Music publishing revenue fell 12.9 percent to $142 million.
For the full year, the company lost $143 million, or 96 cents per share, compared with a loss of $100 million, or 67 cents per share, a year prior. Revenue fell 7 percent to just under $3 billion from $3.2 billion.
Shares fell 43 cents, or 7.3 percent, to $5.43 in midday trading. The stock has traded between $4 and $8.02 over the last 52 weeks.