Warner Music Group Corp. (NASDAQ: WMG) shares fell more than 4 percent this morning after the New York-based entertainment and record label conglomerate reported its fourth-quarter earnings below the consensus forecast.
The company posted a profit of $1 million, or $0 per share for the three months ended September 30, as compared to $91 million, or 18 cents per share in the same period of 2019, and below analysts’ average estimate of 5 cents. On an adjusted basis, earnings decreased to $20 million, versus $125 million in the year-ago quarter.
Revenue rose to $1.13 billion in the quarter, up just 0.2 percent from last year, as strong digital revenue could not make up for the weak performance by its music publishing business and recorded music artist services.
Speaking on the results, CEO at Warner Music, Steve Cooper said “we are proud of everything we’ve accomplished in the past year, despite the challenging conditions that the world has faced. We’re essentially flat against a record-breaking prior year and, during the quarter, we grew 11% on an as-reported basis, excluding the revenue streams most impacted by COVID.”
The company said it had cash of $176 million from operating activities in the quarter, as compared to $156 million in the same period, a year earlier. As of September 30, the company’s cash balance stood at $553 million, while it had a total debt of $3.104 billion.
Warner Music (WMG) stock has been on a roller coaster ride since going public this year. Its share price touched a high of around $33 in June. However, its share price has mostly stayed flat or declined in recent months. Overall. WMG stock value has decreased by more than 7 percent on a year-to-date basis, including today’s drop.
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