Event organizer and ticket distributor Live Nation Entertainment (LYV -0.98%) reported its third-quarter results on Nov. 1. Management hailed this period as "its best quarter ever," driven by broad-based revenue growth across its three reportable business segments. On the bottom line, Live Nation's increasingly profitable concerts provided essentially all of the upside Live Nation needed.
Live Nation's third-quarter results: The raw numbers
|
Metric |
Q3 2018 |
Q3 2017 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue |
$3.84 billion |
$3.44 billion |
12% |
|
Net income attributable to shareholders |
$173 million |
$136 million |
27% |
|
GAAP earnings per share (diluted) |
$0.70 |
$0.53 |
32% |
Data source: Live Nation Entertainment.
What happened with Live Nation this quarter?
- Concerts delivered 12% year-over-year revenue growth. These numbers were lifted by 8% higher attendance, 14% higher average ticket prices, and more than 10% higher customer spending on items such as food and T-shirts.
- The 71 million fans attending Live Nation's events during the first three quarters were spread across 24,000 shows in 40 countries. The average total top-line impact of each attendee was 9% below the year-ago period's, when 65 million customers attended 20,000 different shows.
- Powered by the effects mentioned above, the concerts division saw operating profits rise 44% year over year. Live Nation's total operating income rose 16% but would have declined by 3.5% without the muscular contribution from concerts.
- The Ticketmaster operation is on pace to sell 500 million tickets worth $31 billion in 2018 as a whole. As a reminder, Ticketmaster delivered 500 million tickets in 2017 as well, adding up to a gross transaction value of $30 billion.
Image source: Getty Images.
What management had to say
In a conference call with financial analysts, Live Nation CEO Michael Rapino extolled the virtues of combining a large ticketing platform with a presence in global events management.
"Ticketmaster's results are validating our dual strategy of delivering a great marketplace for fans to buy tickets by providing the greatest enterprise tools to venues, teams, and artists, looking to control their tickets and maximize the value of their events," Rapino said. "By continuing to do both effectively, I expect us to deliver high single-digit growth in ticketing [adjusted operating income] this year."
Looking ahead
Live Nation is not known for providing detailed next-quarter forecasts, but management did paint up some financial targets in broad strokes.
- International concerts are facing tough year-over-year comparisons in the fourth quarter, since the 2017 period saw heavy touring from superstars such as Coldplay, U2, and Bruno Mars.
- The sponsorship division's sales and operating profits should increase by double-digit percentages, comparing the full fiscal year against 2017. The segment is looking back at 11% growth in both sales and operating income through the first nine months.
- Ticketing should see high-single-digit sales growth in 2018 with operating margins in line with the year-ago period's. That would be a continuation of Live Nation's ticket sales through the first three quarters.
