EMI Turns Profit – A Look Inside

LONDON (Hypebot) – In a memo to his staff at EMI, Guy Hands announced that his turn around efforts are beginning to bear fruit. In the last quarter

Revenue in the record division is up 61%

Earnings doubled

Quarterly earnings before interest, tax, depreciation and amortization of $118.4M
compared to a loss of $71.5Min the same period in '07.

Seemingly impressive stuff, but its only part of the real story:

The Coldplay album had just been released; so its positive impact will be felt of the coming quarter or two

Many of the most expensive restructuring costs including executive buy-outs will not be reported until next quarter

EMI staffers say the savings came from lower marketing outlays to achieve similar sales. But is the model sustainable? When a product cuts ad budgets, the effects are not felt until months later when residual consumer interest fades.

Morale in many departments remains low

New signings (aka future sales) remain slim