What happened
Shares of Warner Music Group (WMG -0.42%) were moving higher today after the diversified global music entertainment company delivered strong results in its fourth-quarter earnings report.
As of 12:45 p.m. EST, the stock was up 14.3%.
So what
Warner Music, which owns record labels including Elektra, Reprise, and Atlantic, said revenue in Q4 increased 9%, or 16% in constant currency, to $1.5 billion, which topped expectations at $1.41 billion.
Revenue grew in all three of its business segments, though the majority of its sales come from recorded music, which increased 6% to $1.24 billion.
Profitability also improved in the quarter as adjusted operating income before depreciation and amortization (OIBDA) increased 22% in constant currency, or 33%, to $265 million. Music streaming subscriptions continue to grow, fueling the company's performance and its scalable business model. Management credited artists such as Ed Sheeran, Dua Lipa, and Lizzo as major sellers.
On the bottom line, earnings per share jumped from $0.05 to $0.28, easily beating the consensus at $0.13.
CEO Steve Cooper said,
Against the backdrop of a challenging macro environment, we once again proved music's resilience, with new commercial opportunities emerging all the time. We're very well positioned for long-term creative success, and continued top and bottom line growth.
Now what
Management didn't give any guidance in the earnings release, but the results, which come at a time of mounting macroeconomic headwinds, are encouraging, and, indeed, music should be more resilient to a recession than other areas of the entertainment industry as Cooper noted above.
With an impressive stable of artists and a strong business model, Warner Music looks well positioned for long-term growth.
