Warner Music sees deficit widen

From Times Wire Services

Warner Music Group Corp. said that higher costs and a shift to digital music resulted in a wider fiscal second-quarter loss and that it had suspended dividends.

The company's shares fell 16 cents, or 1.8%, to $8.89.

For the period ended March 31, the New York-based recording company reported a loss of $37 million, or 25 cents a share, compared with a loss of $27 million, or 19 cents, a year earlier. Sales grew 2% to $800 million.

Losses from continuing operations totaled 23 cents a share. On that basis, analysts polled by Thomson Financial expected a per-share loss of 12 cents on sales of $779.7 million.

"Physical recorded music sales continued to decline industrywide and slowing ring tone growth as well as a softening broader economy are negatively impacting the music industry," Warner Music Chairman and Chief Executive Edgar Bronfman Jr. said.

Warner said it was suspending its dividend to shareholders to reduce debt amid the uncertain economy, unstable credit markets and continuing softness in the recorded music market.

Bronfman said the move would enable the company to sustain its investment level and develop its artist roster.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World