Breaking: Warner Music Posts Substantial Quarterly, Annual Losses

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Warner Music Group posted substantial quarterly and fiscal year losses early this morning, thanks largely to recorded sales declines and restructuring costs.

According to details shared ahead of the opening bell on Wall Street, losses at Warner Music (WMG) reached $18 million (12-cents per share) for the period ending September 30th, a reversal from a year-ago quarterly gain of $6 million (4-cents per share).

Analysts, as polled by FactSet, had expected a quarterly gain of 4-cents per share.  Separately, a group of analysts polled by Thomson Reuters called for profits of 5-cents per share.  The difference between analyst expectations and actual returns will probably drive share-price declines during Tuesday trading.

A substantial portion of the losses were attributable to severance costs, a downsize that will ultimately minimize losses and overhead.  That is inline with efforts at other major labels.

Other indicators were mildly positive.  Quarterly revenues edged upward one-percent to $861 million, and 5 percent on a constant-currency basis.  That actually beat analyst expectations, which hovered around $820 million.  Digital revenue topped $184 million, up 10 percent over the previous-year period, and 12 percent on a constant-currency basis.  Digital assets accounted for 21 percent of overall quarterly revenues.

On the fiscal year, losses were also quite substantial, and revenues declined.  Specifically, losses reached $100 million, broader than a year-ago drop of $56 million.  Revenues reached $3.176 billion on the year, down 9 percent.

Report by Alexandra Osorio.