NEW YORK (VIP NEWS) — Strong releases helped Warner Music Group post gains in the quarter ending January 31st.
Revenue rose 8% to $675 million from $623 million a year earlier. Operating income rose 159% to $57 million and operating income before depreciation and amortization (OIBDA) increased 37% to $116 million. Net income improved to $2 million from a net loss of $36 million a year earlier.
“We recorded an impressive quarter, thanks to great releases from our artists and excellent execution from our operators,” said Stephen Cooper, Warner Music Group’s CEO. “These are the results of a very strong release schedule, solid performance from carryover releases and continued financial discipline.” Releases by Bruno Mars, Josh Groban, Paramore and Blake Shelton were singled out for their impact on the quarter's numbers.
Digital revenue improved 20% to $281 million, and its 41.6% of total revenue was an improvement from 37.7% in the prior-year quarter. Digital revenue increased 18% to $262 million in the recorded music division and 50% to $21 million in the publishing division.
The recorded music division posted gains in nearly all categories. Along with the digital gain, physical sales rose 12% to $190 million and licensing improved 11% to $52 million. Only revenue from artist services and expanded rights dropping in the quarter, falling 17% to $50 million from $60 million. The United States accounted for 76% of the quarterly gain in recorded music revenue.
Warner/Chappell's revenue was flat at $127 million. Performance royalties rose 4% million to $48 million. Mechanical revenues and synchronization revenues each dropped 16% to $27 million.
Warner has used its improved cash position to pay off some debt and plans to reduce debt more in the future. The company paid off $102.5 million of its existing term loan on May 9th; the remaining principle is $490 million. On Monday, Warner issued an irrevocable notice of redemption, for $50 million and €17.5 million, related to two senior secured notes. After the notices of redemption, Warner expects to have annualized interest expense of $198 million on $2.88 billion of outstanding debt, an improvement from the $184 million of interest on $2.24 billion of debt following refinancing in November.
The financing related to Warner's acquisition of Parlophone was completed last week, Cooper revealed during the call. He added the acquisition has received regulatory approval in the United States, Brazil and Austria and the remaining merger review in the European Union "is proceeding on schedule." The company expects the merger to close by the middle of calendar 2012 and anticipates annual cost savings of $70 million. — According to Billboard