Warner Music's 1st-qtr. Financials Dip

NEW YORK‹Warner Music Group's revenue and profit continued to decline in the first quarter, as domestic and international sales fell from the levels of a year ago.
Parent company Time Warner says the music unit's cash flow (earnings before interest, taxes, amortization, and depreciation) dropped 21.2% to $93 million from $118 million in the first quarter of 1997 (Billboard Bulletin, April 16).
Revenue for the worldwide music company, whose label groups include Atlantic, Elektra, and Warner Bros., fell 4.8% to $888 million from $933 million last year.
Company executives declined comment on the results.
In domestic market share for total albums, Warner Music's distribution company WEA fell to second place during the quarter, at 17.8%. A year earlier, it led all distributors with 19.4%. For current, or new, albums, WEA also fell to second place (16.5%, from 18.1% a year ago). WEA remained the leader in country albums, but its share fell sharply to 23.5% from 30.7% last year. In R&B, the company fell to last place among the six major distributors, with 11.3% of the market, from a second-place 16.5% share a year ago (Billboard, April 18).
Some of the music unit's best-selling albums in the U.S. during the first quarter were "Ray Of Light" by Madonna (Maverick/Warner Bros.), "Pilgrim" by Eric Clapton (Duck/Reprise/Warner Bros.), and "Yourself Or Someone Like You" by matchbox 20 (Lava/Atlantic).
Sources say that Warner's record club, Columbia House (a joint venture with Sony Music), continued to struggle, which contributed to the disappointing results.
Time Warner also reports that its filmed entertainment unit, Warner Bros., saw a 13.3% increase in cash flow to $119 million from $105 million a year ago, on an 11.7% rise in revenue to $1.31 billion from $1.17 billion. The company attributes the gains to the "strong performance" of worldwide TV programming.
Overall, the New York-based Time Warner Inc. posted a $62 million net loss on $3.13 billion in revenue, compared with net income of $35 million on $3.03 billion in revenue a year ago.
On the day the results were announced, Time Warner's stock fell 12.5 cents to $77.875 a share in New York Stock Exchange trading.