Warner Music-Why I’m Mixed

As you probably know, Warner Music reported another bad quarter this morning. Even though part of the decline was due to tough comparisons, a revenue-down-14% and income-down-75% way below expectations type of quarter. However, they were the only major music company to gain market share over the past year- a sign that the company is doing better than the industry. There were two other bright spots a) Japan–sales up 70% YoY and b) digital, up 45% YoY to 11% of sales.

I don’t see much happening with this company untill 3Q- when we know for sure about whether or not a merger with EMI is happening. Also the company stated that its a back-end loaded year in terms of releases.

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