LYV Q2 Beats Expectations

Analysts from Zacks Investment Research estimated an average 7 cents per share.

The company posted revenue of $2.18 billion in Q2, up 23 percent, and earnings of $37.7 million, with operating income rose 7 percent to $74 million and adjusted operating income up 28 percent to $181 million.

Live Nation President/CEO Michael Rapino said that 2016 may be the largest stadium year in history, adding that amphitheatre business was also up with 4.5 million concertgoers. Across all platforms, Rapino reports an 18 percent increase in show count for the year thanks to the addition of more festivals as well as club and theater business.

Ticket sales are up 17 percent with more than 50 million sold to date.

Higher ticket sales also translates to more parking and concession sales. “Per head” spending was up $2 per fan for the quarter compared to 80 cents per head for all of last year, which Rapino attributes to improved food and beverage offerings and “expanding our products to provide more options for high-end customers.”

Ticketmaster reported revenue growth of 23 percent, operating income of 28 percent and AOI of 20 percent for the quarter, as well as adding more than 400 new clients globally.

“As well as Ticketmaster has done this year, I have even greater expectations going forward,” Rapino said. “Every one of our ticketing verticals has tremendous runway for global growth.

“After our strong performance in the first half of the year, we expect 2016 to be another year of growth and record results for the company. Based on our leading indicators in concerts, sponsorship & advertising, and ticketing, we expect revenue and AOI growth in each of these businesses and overall for Live Nation this year.”

During the Q&A, Rapino and COO Joe Bechtold stressed that the acquisition of South Africa’s Big Concerts, which was already a partner, will give Live Nation an office in the market as well as add to the revenue streams.  Meanwhile, the purchase of Tickethour, which focuses on ticket sales for U.K. sports events, will be integrated into the Ticketmaster U.K. platform.

Live Nation also stressed it expects more revenue from its Grab N Go concessions platform, increase in high-end wines and improvements to VIP hospitality. Bechtold expects the burst of revenue in the second quarter to have spillover into the third.

As for the digital partnerships — from Yahoo to Snapchat to Hulu to NextVR – one caller suggested that Live Nation was less than enthusiastic about its future with digital media. Rapino responded with the simple point that the company is still about live experience (the “Kodak moment” of being at a concert) but the digital relationships will add more offerings for sponsorship partners as well as provide an online experience for the fans.

“I have never been a big proponent that we’re going to take Guns N’ Roses and have a big upsell to the home no matter how dynamic the content,” Rapino said. “I think [digital/VR] is great for the industry for sales but most of the monetization will be connected to the onsite.”