Shares of Live Nation Entertainment (NYSE:LYV) have dropped sharply over fears of the coronavirus, but the concert operator had encouraging news for investors.
The company said it has already sold 38 million tickets for shows in 2020. That's an increase of 10% compared to this time last year. What's more, management reported that they have seen no slack in demand from concertgoers as a result of the outbreak.
Momentum for 2020
Live Nation reported fourth-quarter results on Thursday after the market close, and the numbers highlight a strong finish to 2019. Revenue for the full year was up 7% to $11.5 billion. Good cost discipline allowed operating income to climb 19% to $325 million for 2019.
For the year, attendance was up 5% to 98 million. Live Nation is also seeing strong growth in its high-margin sponsorship business with revenue up 17%. Also, management said they have deployed Ticketmaster's new digital ticketing system, called Presence, in over 700 venues in 2019, operating events for 120 million fans.
Demand remains healthy
Looking ahead to 2020, cancellations in China and Italy related to the coronavirus represent only 0.5% of the expected attendance at shows this year. While management is prepared for more outbreak around the world, Live Nation President Joe Berchtold said, "Thus far, we have seen no pullback in fan demand or ticket buying outside of the specifically affected areas." Berchtold added that 70% of attendance is weighted toward the second half of the year.
Live Nation continues to benefit from global demand for concerts, including festivals, theaters, and clubs. Concerts have lower ticket prices on average than sporting events and spending per visitor at the show has been trending higher. Both of those metrics are a healthy sign for Live Nation's long-term growth prospects.