Warner Music posts loss as CD sales drop

NEW YORK — Warner Music Group lost another $18 million in the latest quarter, as demand for compact discs continued to wither and revenue from digital music sales grew at only a sluggish pace. Overall revenue fell 14 percent. Its shares tumbled almost 8 percent in pre-market trading.

Like the rest of the music industry, Warner Music is struggling to make the transition from physical to digital recordings. While online sales have improved, they still represent just 24 percent of total revenue.

For Warner Music’s fiscal first quarter, which ran through Dec. 31, the company reported a loss of $18 million, or 12 cents per share. That compares with a slightly smaller loss of $17 million, or 11 cents per share, in the same quarter a year ago.

The most recent quarter included one-time severance expenses amounting to 7 cents per share, compared with 3 cents per share a year earlier.

The company’s loss would have been bigger were it not for cost cutting. Warner Music cut expenses by 13 percent to $762 million from $871 million in the year-ago quarter.

Revenue dropped to $789 million from $918 million.

Warner Music shares dropped 48 cents, or 7.7 percent, to $5.75 ahead of the market opening Tuesday.