EMI’s Shares Fall on Profit Warning

EMI Group’s stock plunged Monday after the British music giant warned that tough conditions in some of its major music markets will hit first-half operating profit by about 20%.

EMI, one of five entertainment conglomerates that dominate the world’s music industry, has seen its sales hit hard by the Asian economic crisis and has experienced a slowdown in sales in Latin America and its major European markets.

Stock in the company hit a six-year low during trading Monday. EMI’s American depositary receipts were unchanged at $13.63 on Nasdaq.

EMI, home to such acts as the Foo Fighters and Spice Girls, said first-half sales dropped about 15% in Southeast Asia and 6% in Latin America, with Brazil down about 25%. The company also noted downturns in Germany, Britain and France.

Asia accounts for nearly one-fifth of EMI’s global market. The strong pound has also had adverse effects on its overseas earnings. The company also blamed the downturn on a lack of hits outside the United States.

In the six months ended Sept. 30, 1997, EMI turned in operating profit of $189 million and made pretax profit of $126.9 million.