Dour financial results have never looked so good. With a few exceptions, Q3's earnings results offered a snapshot of repeated losses and turnaround plans bearing little fruit. But in today’s environment, survival is a marker of success. Music companies and retailers have been hit by both an industry downtown and an economic recession. Companies like Warner Music Group, Universal Music Group and Sony Music all reported lower revenue - expect that trend to continue. Digital revenues pale in comparison to what is being lost in physical revenue, which drags down the performances of both record labels and music publishers. New digital revenues (ad-supported and subscriptions) are years away from making a significant impact. On a positive note, expect sponsorship and synchronization revenue to jump next year - a result of marketing budgets rebounding as the economy improves.

Music retailer Hastings posted a small loss while Trans World posted another large loss. The importance of a healthy holiday season cannot be overstated for any entertainment company, but Trans World is especially in need of some momentum. The company has struggled lately, although executives have remained optimistic and say the company is well positioned for Christmas.

Hopeful merger partners Ticketmaster and Live Nation reaffirmed their optimism that regulators will approve their merger. Even more optimism was seen at Sirius XM, where cost-cutting and an equity investment by Liberty Media had helped the satellite radio operator inch closer to profitability.

Here’s a round-up of the latest earnings:

Unlike most music-related companies, Ticketmaster generates profits and positive cash flow. With the help of Front Line's $56.4 million in revenue, Ticketmaster's revenue was up 3% to $349 million in Q3 2008 compared to the previous year. Net income was up 36% to $13.1 million. Ticketmaster's share price is up 67% year to date.
Ticketmaster's Q3 earnings release.

Live Nation
Live Nation's revenue improved 13.8% over the previous year, rising to $1.81 billion, but it recorded a lower net income and has a net loss of $61 million through the first three quarters of 2009 (versus $100 million in profit last year). In Q3, the company continued to sell off non-core assets and put cash on its balance sheet. Live Nation's share price is up 27% year to date. While the company continues with its long-term strategy, it has not bore much fruit. Live Nation has $2.7 billion in assets yet hasn't had an annual profit since 2004.'s post on Ticketmaster's and Live Nation's Q3 earnings.

Warner Music Group
Revenue dropped 9% (3% on constant currency basis) to $3.176 billion. International revenue was down 6.6% while domestic down 11.8%. Net loss was $100 million compared to a loss of $56 million in 2008. Free cash flow (cash from operations minus capital expenditures and cash paid for investments) was $316 million. That was a big jump from free cash flow of $137 million in 2008. (Remember that in Q1 WMG sold its stake in Front Line Management for $123 million.) Recorded music revenue dropped 9.4% -- domestic was down 14.6% and international was down 4.6%. WMG's share price is up 73.1% year to date. Warner Music Group's Fiscal Q4 and Year End Earnings Release.

Sony Music
Sony Music reported revenue of $1.38 billion and an operating income of $96 million in Sony Corp's fiscal Q2 ending September 30. That was a 3% decrease (on a yen basis) in revenue versus the amount generated by Sony BMG in the same quarter last year. Q2 revenue was up 21.7% versus the previous quarter. (Sony owned 50% of Sony BMG until the music group became a wholly owned subsidiary of Sony on October 1, 2008.)
Sony Corp's Q3 earnings release.

Universal Music Group
Universal Music Group revenue fell nearly 12% (14% at constant currency) in the third quarter of 2009 and slipped 5% (8.4% at constant currency) through the first three quarters of 2009. Revenue was €969 billion ($1.4 billion) in Q3 and €2.98 billion ($4.4 billion) through the first three quarters. Revenue continued to slide. UMG's revenues through 2009's first three quarters were 8.8% lower than the same period in 2007. (On Thursday, November 12, the exchange rate is €.0673 to US $1.00.)

Revenue for the quarter dropped 7.7% year over year. Music revenue dropped 4.2% to $38.8 million. That was the first quarter since Q2 2008 music revenue was below $40 million. In addition, the company revealed it shed 50,000 Rhapsody subscribers, ending Q3 at 700,000. That was its lowest subscriber count since Q2 2008. Since this earnings release, RealNetworks has disclosed it is in discussions with MTV Networks to restructure its Rhapsody joint venture "to enable Rhapsody to operate more independently of either party." RealNetworks' share price is down 3.7% year to date.
RealNetworks' Q3 Earnings Release.

Entertainment retailer Hastings lost $3.4 million in Q3 and $2.1 million for the nine months ended October 31. Comp store merchandise revenue was down 1.6%. Through the first nine months of the year, music sales were down 14%, video games were down 9% and movies were down 6%. Hastings did what many companies are doing during the recession: it reduced debt, reduced inventory and put more cash on the balance sheet. Hastings' share price is up 149.1% year to date.
Hastings' Q3 Earnings Release.

Trans World
Trans World posted a Q3 loss of $22.3 million (an improvement over Q3 2008) on revenues of $161.4 million (a 17% decline against Q3 2008). Comp store sales were down 9% in Q3. The company's new loss for the first nine months of 2009 was $53.8 million, a slight improvement from the $59.5 million loss in the same period in 2008. Inventory was down, debt was down and 125 underperforming stores will have been closed by year end. But since music represents 37% of revenue, the company remains exposed to the decline of the CD - in terms of both price and unit sales.
Trans World's Q3 Earnings Release.

Sirius XM
Satellite radio company Sirius XM is finally approaching profitability. The company posted a net loss of $149 million in Q3 and has a net loss of $543 million in the first three quarters of 2009. That's a vast improvement over the $4.9 billion and $5.1 billion losses in Q3 and first three quarters of 2008, respectively (the company took a $4.75 billion charge for impairment of goodwill in Q3 2008). One very important turnaround was the company's $253 million in cash flow from operations in the first three quarters of 2009 - almost a half billion dollars better than the same period last year. Since Liberty Media $530 million investment in Sirius XM in February, the company has received an improved outlook from Standard and Poor's Ratings Services and investors have reacted positively. Sirius XM's share price is up 425% year to date.
Sirius XM Earnings Release.