Warner Music Gets Digital Sales Boost
Posted on: Friday, 5 August 2005, 18:00 CDT
Aug. 5--Digital music sales are ringing up better than expected results for Warner Music Group.
Shares in Edgar Bronfman Jr.'s music empire rose nearly 7 percent, or $1.07, to $16.80 yesterday, after the company posted a smaller than expected loss. But that's still below the company's May initial public offering price of $17.
Investors focused on the company's rising digital sales, which include downloads from digital music stores like iTunes, as well as ring tones, master tones, and ring backs for cell phones.
Warner Music's digital music sales rose 25 percent from the previous quarter and were up nearly fivefold from a year ago. Digital music now accounts for 6 percent of the company's overall sales.
"There is little doubt that we are transitioning into a multifaceted, music-based content company," Bronfman told his staffers in an internal memo yesterday.
Also pumping up sales in the quarter were big releases from Rob Thomas, Green Day, and Michael Buble.
On a conference call with investors yesterday, Bronfman highlighted the success of British singer/songwriter James Blunt, who is topping the pop charts in Europe.
Warner Music posted a loss of $179 million, or $1.41 a share, compared with a year-ago loss of $91 million, or 85 cents a share. Excluding one-time items, the company posted a loss of $35 million, or 27 cents a share, beating Wall Street estimates of 33 cents a share. Sales in the quarter rose 2 percent to $742 million.
The quarter was a much-needed boost for Bronfman. The Warner Music IPO was considered a bust, pricing at $17, well below initial targets of $22 to $24. Wall Street has been skittish about continued sluggish sales of CDs.
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Source: Daily News
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