RUMOR MILL
Warner Music’s domestic market share for albums dropped to 15% in the first quarter from 17% in the same period a year ago.
Thursday, April 13, 2000
WARNER MUSIC GROUP
REVENUE DIPS
Decline In U.S. Sales Blamed For Drop
Warner Music Group revenue dipped 2% in the first quarter to $917 million from $936 million the previous year.
Parent company Time Warner attributes the drop to a decline in U.S. sales.
The music unit's earnings before interest, taxes and amortization declined 10.1% in the quarter to $80 million. Warner Music's domestic market share for albums dropped to 15% in the first quarter from 17% in the same period a year ago.
The U.S. sales decline was offset partially by increased DVD manufacturing, the company said.
Time Warner also says that it took a $220 million noncash writedown on its 50% stake in direct marketer Columbia House. The company says it removed the business from its music division because it is being restructured and restated last year's figures to make them comparable. During the quarter, a proposed merger of Columbia House and CDnow was terminated. The writedown caused Time Warner to report a $96 million net loss in the quarter on $6.5 billion in revenue.
In a statement, Time Warner said, "The decline in Columbia House is going to continue through the near term," a Time Warner statement said. The company also said it will "evaluate strategic alternatives" for the business since the CDnow deal was squashed.
Time Warner's stock fell $5.75, or 6%, Tuesday (4/11) to close at $90.
Parent company Time Warner attributes the drop to a decline in U.S. sales.
The music unit's earnings before interest, taxes and amortization declined 10.1% in the quarter to $80 million. Warner Music's domestic market share for albums dropped to 15% in the first quarter from 17% in the same period a year ago.
The U.S. sales decline was offset partially by increased DVD manufacturing, the company said.
Time Warner also says that it took a $220 million noncash writedown on its 50% stake in direct marketer Columbia House. The company says it removed the business from its music division because it is being restructured and restated last year's figures to make them comparable. During the quarter, a proposed merger of Columbia House and CDnow was terminated. The writedown caused Time Warner to report a $96 million net loss in the quarter on $6.5 billion in revenue.
In a statement, Time Warner said, "The decline in Columbia House is going to continue through the near term," a Time Warner statement said. The company also said it will "evaluate strategic alternatives" for the business since the CDnow deal was squashed.
Time Warner's stock fell $5.75, or 6%, Tuesday (4/11) to close at $90.
