UMG Q3 NUMBERS STRONG DESPITE OVERALL MUSIC SLUMP

Despite a challenging third quarter, Universal Music Group reported a 6% increase in Q3 EBITDA to 250 million euros ($226.7 million), reflecting strong performances in North America, France, the U.K., Australia, and Music Publishing and a further improvement in Japan. And this against the backdrop of a global music market that declined 5% in value in the first six months of the year and an estimated 2.7% further decline in value in the third quarter.

Revenue was 3.9% below last year, down from 1.52 billion euros ($1.38 billion) to 1.46 billion euros ($1.32 billion), reflecting the severe market decline in Latin America and weak market conditions in several major markets, including Germany.

The U.S. market is estimated to have grown slightly in the quarter. UMG year-to-date marketshare versus the comparable period last year has increased in France, the U.K., and Australia and essentially remained constant in the U.S. The company estimates that its worldwide marketshare has increased.

UMG's strong releases in the fourth quarter—including DMX, No Doubt, Ruff Ryders, Smash mouth and Enrique Iglesias—give it confidence for the remainder of the year. The fourth quarter will also see the launch of Pressplay, the online download subscription service Universal owns jointly with Sony.

While revenues were down slightly compared to the same period last year, UMG's $1.32 billion revenues and $226.7 million EBITDA still dominated a down market. In fact, analysts speculate that UMG's EBITDA figure is more than double that of the rest of the Big Five combined.

A weak music market, fallout from the Sept. 11 terrorist attacks and basically fewer consumers shopping at retail has led to a slump in the music business that has accounted for every other major music group's postings of less-than spectacular quarterly figures.

Sony Corp. posted a loss in its music division for its fiscal second quarter, which ended Sept. 30, of $43.5 million as compared to a loss of $32.1 million in the same period last year.

For the year ended March 31, EMI posted a 5.7% increase in EBITDA to $373.6 million, on revenues that jumped 12% to just shy of $4 billion. The company next reports to the London stock exchange Nov. 19, and its annual results will be out in May 2002. While EMI does not issue quarterly results, in late September the company did issue a profit warning based on worsening conditions for the global music industry.

AOL Time Warner on Oct. 17 reported a wider net loss for its third quarter due to recorded charges related to its merger and write-downs from investments. AOL Time Warner has a net loss of $996 million or 22 cents per share, in the three months ending Sept. 30. Earnings in the music division continued to disappoint, tumbling 21% from EBITDA $110 million in a similar period last year to $87 million, which the company attributed to lower sales across the industry, higher marketing expenses and foreign currency losses

Bertelsmann is a privately held company, so figures for the music unit BMG are unavailable to the public. However, insiders indicate that losses at the company are the highest they've ever been.