Warner Music posts first profit since 2008
NEW YORK (AP) — Warner Music Group Corp. posted its first profit in more than four years on Tuesday, as the recording home of musicians such as The White Strips and Blake Shelton benefited from rising digital music sales.
The results are the latest sign that the recorded music industry is recovering from a slump that has lasted for more than a decade.
Net income in Warner Music's fiscal second quarter, which ran through March 31, came to $2 million, reversing a $36 million loss in the same months a year ago. The company last posted a profit, of $23 million, in the quarter through December 2008.
Revenue grew 8 percent to $675 million, with digital revenue up 20 percent to $281 million. The proportion of revenues from digital sources grew to 41.6 percent of the total from 37.7 percent. Digital sales come from download stores, such as iTunes, and streaming services, including Spotify.
Compact disc sales have declined since their peak in 2000, cutting overall revenue industrywide by more than half.
A decline in interest expense due to Warner Music's debt refinancing last November also helped the company post the profit.
Warner Music was taken private by billionaire Len Blavatnik's Access Industries for about $1.3 billion in July 2011. It still has publicly traded debt, which requires that it release its financial results.