warner music group stock

Warner Music Group inventory (NASDAQ: WMG) spiked after the corporate achieved a modest year-over-year (YoY) income enchancment in addition to a 63 p.c working earnings enhance throughout 2022’s third quarter.

The Large Three report label, which is about to welcome a new CEO at 2023’s begin, posted its Q3 2022 (the fiscal 12 months’s fourth quarter) efficiency specifics as we speak. Based on the breakdown, Warner Music Group income completed at nearly $1.5 billion throughout the three-month stretch, up 8.8 p.c from Q3 2021.

Recorded music as soon as once more accounted for the lion’s share of the entire, $1.24 billion, a YoY uptick of about six p.c. And inside this recorded determine, the key label recognized $830 million in digital earnings (up $23 million YoY), $123 million from bodily (down $4 million), $204 million attributable to “artist companies and expanded-rights” (a $36 million enhance), and $87 million from licensing (a achieve of $17 million).

Nonetheless, the digital sum “consists of $31 million in downloads and different digital income from the Copyright Settlement” – with out which it will have suffered an $8 million YoY slip – and streaming income dipped by 0.4 p.c YoY.

When made to mirror “the influence of a brand new cope with one of many Firm’s digital companions,” although, recorded music streaming earnings truly grew by 4.7 p.c YoY, per execs. The expansion in artist companies and the renewal of DSP offers are stated to have offset a “excessive single digits” slowdown in ad-supported revenue.

(For reference, Sony Music Leisure reported a 34.1 p.c YoY enhance in Q3 2022 recorded music income from streaming, in addition to a 19.6 p.c YoY increase in subscription and streaming income for Common Music Group throughout the interval. WMG CEO Stephen Cooper stated throughout his firm’s earnings name that he’s “optimistic” additional streaming price raises are on the best way.)

“Lastly, the income progress curve of rising streaming platforms continues to outpace extra established codecs,” Cooper relayed throughout the identical convention name. “These new platforms are all closely reliant on music, and as engagement continues to develop, we anticipate monetization to comply with swimsuit. In our recent deal with Meta, our annualized income from this class reached 370 million [dollars] this quarter.”

Shifting to the publishing aspect, Warner Chappell is alleged to have pulled down $254 million all through the quarter, for a virtually 25 p.c bounce from Q3 2021.

Predictably, digital drove Warner’s publishing progress, with income within the sub-segment having spiked by $39 million YoY to crack $159 million. Publishing earnings from performances grew by $10 million to hit $40 million, per the useful resource, whereas sync ($39 million), mechanical ($13 million), and different ($3 million) remained flat towards their Q3 2021 counterparts.

Warner Music’s Q3 2022 web earnings got here in at $150 million (up $120 million YoY), the doc exhibits, whereas working earnings totaled $163 million (up 63 p.c YoY) and OIBDA grew by round 37 p.c to $245 million. Lastly, earnings per share have been $0.28, WMG stated.

On the time of this piece’s writing, Warner Music Group inventory (NASDAQ: WMG) was up 14.6 p.c from Monday’s shut, at $30.92 per share. Earlier in November, the enterprise announced an $82.4 million quarterly dividend.

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