EMI Profit Drops 20% in First Half

British music giant EMI Group announced Tuesday that operating profit plunged 20% for the period from March through September, due primarily to poor financial conditions in Asia and Latin America.

EMI, the subject of renewed takeover talk in recent days, said its operating profit fell 19.9% to $150.5 million in the first half of its fiscal year. The company’s profit fell 1% in Europe, 30% in Brazil and 15% in Southeast Asia.

The London-based conglomerate, home to such acts as the Beastie Boys and Master P, said sales were up in its music publishing division and U.S. operation, which dominates the U.S. pop chart this week with a new album from Garth Brooks.

Despite strength in the U.S. market, EMI’s full-year profit in North America is unlikely to grow at the same rate because its U.S. product release schedule was weighted toward the first half.

Analysts predict that if EMI posts shrinking profit again in the second half of its fiscal year in April, it could push the stock price down considerably--making the company ripe again for a takeover.

EMI has been the on-and-off subject of takeover speculation for several years. The company’s shares rallied last week after media reports about renewed interest from Germany’s Bertelsmann and Rupert Murdoch’s News Corp.

News Corp. sources said last week that the company’s senior executives have been weighing the possibility of an EMI acquisition, but denied that the two companies were in actual talks. Murdoch confirmed his company’s interest, but said he is concerned about the price.

“We are too worried by the values put on music at the moment, but I’d be lying to you if I said I wasn’t watching the [EMI] situation,” he said last week.

Bertelsmann also denied this week that it was in talks with EMI. But EMI Chairman Sir Colin Southgate did meet last month in London with BMG chief Michael Dornemann and Siegfried Lutcher, chief financial officer at Bertelsmann, to discuss a variety of business opportunities, sources said.

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Reuters was used in compiling this report.