Warner Music Group says it posted a fiscal second quarter net loss of $18 million vs. a net loss of $45 million during the same period a year ago.

Warner Music Group says it posted a fiscal second quarter net loss of $18 million vs. a net loss of $45 million during the same period a year ago.

Revenue for the three months ended March 31 increased 4.4% to $767 million, while operating income totaled $27 million, up from a prior year loss of $21 million.

Recorded Music revenue expanded by 4.9% to $621 million. Gains in digital sales were offset by declines in physical product sales. Operating income was $30 million compared to a $23 million operating loss last year.

Music publishing revenue rose 3.4% to $154 million, driven by foreign currency exchange rates. Increases in performance and synchronization royalties were offset by overall declines in mechanical revenues.

Digital revenue totaled $35 million or 4.6% of total revenue—up from fiscal first quarter revenue of $25 million and full year 2004 digital revenue of $32 million.

The company claims a cash balance of $440 million as of March 31.

Shares in WMG were down 3% in early trading Monday at $15.45.