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Monday, Aug 15, 2022

Warner Shares Slip on Increased Q2 Loss

Shares in Warner Music Group Corp. dropped as much as 25 percent Thursday after the record label reported a wider second-quarter loss forcing it to suspend its quarterly dividend.

Warner reported a net loss of $37 million (-25 cents per share), down from a loss of $27 million (-19 cents) in the same period a year earlier.

Revenue grew 2 percent to $800 million.

Warner said overall recorded music sales were essentially flat during the quarter, rising less than 1 percent to $652 million as retailers shifted inventory amid a slowing economy and increased demand for more digital music.

Domestic recorded music sales tumbled 17 percent to $297 million while international recorded music sales jumped 22 percent to $355 million.

Revenue from digital music sales jumped 48 percent to $164 million, equal to about 20 percent of the label’s total sales, Warner said.

Warner attributed the decline in domestic sales to the timing of its album release schedule

The label said it chose to eliminate its 13 cent-per-share quarterly dividend to build cash and invest in new talent.

Shares in the New York-based label, which has significant offices in Burbank, dropped steeply early Thursday and bounced up a bit. They were down 17 percent to $7.50 in late morning trading. The shares were up nearly 50 percent this year before the drop.


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