** charts after earnings **
Warner Music Group Corp. reported Monday a breakeven fiscal fourth quarter, missing expectations, although revenue rose slightly above forecasts. The stock rose 0.8% in premarket trading. Net income for the quarter to Sept. 30 fell to $1 million, or $0.00 on a per-share basis, from $91 million, or 18 cents a share, in the year-ago period. The FactSet consensus for net earnings per share was 5 cents. Adjusted net income, which excludes non-recurring items related to the initial public offering, fell to $20 million from $125 million. Revenue rose 0.2% to $1.13 billion, just above the FactSet consensus of $1.11 billion, as "robust" digital revenue growth was partially offset by a decline in recorded music artist services, and the effects of the COVID-19 pandemic on its music publishing business. "We're essentially flat against a record-breaking prior year and, during the quarter, we grew 11% on an as-reported basis, excluding the revenue streams most impacted by COVID," said Chief Executive Steve Cooper. "Our streaming growth has stayed strong, and we've also seen an acceleration in a whole spectrum of emerging revenue streams such as social media, gaming, and in-home fitness." The stock has lost 3.7% over the past three months through Friday, while the S&P 500 has gained 4.7%.
Warner Music Group Corp. filed plans for an initial public offering Thursday, 15 years after its last IPO and nine years after the company was taken private.
Warner Music, one of three large companies that dominate the recorded-music industry, said in a filing with the Securities and Exchange Commission that it plans to seek $100 million in the IPO, though that is typically a placeholder amount that is updated in later filings. Warner is the parent company for prominent record labels including Atlantic Records, Warner Records and Elektra Records, and prominently mentioned artists Ed Sheeran, Bruno Mars, Cardi B, Twenty One Pilots, Lizzo and Katy Perry in its filing. Warner Music said that in its most recently completed fiscal year -- which ended Sept. 30, 2019 -- the company had profit of $258 million on revenue of $4.48 billion. In the two previous fiscal years, Warner Music respectively had net income of $312 million and $149 million, and revenue of $4.01 billion and $3.58 billion, according to the filing. After going public in 2005, Warner Musicwas taken private by Access Industries Inc. in 2011 for $3.3 billion. Rival Universal Music Group was valued at roughly $34 billion last year in investments from around the globe. Access will still have control of the company if it manages to go public, the company said in its IPO filing. The IPO is being led by Morgan Stanley, Credit Suisse and Goldman Sachs, and the filing did not list a prospective ticker symbol nor name the exchange on which the company intends to list its shares.
