Sony BMG Music Entertainment's sales slid 1.6% to $1.4 billion for the three months ended Dec. 31. Net income for the period increased 26% to $225

The company blamed the revenue dip on the digital download market's inability to fully offset contraction in the CD business. It credited the income gain to lower overhead and restructuring costs, as well as a payday from an unspecified industry legal settlement.

The results were disclosed as part of Sony Corp.'s third quarter earnings. Sony claimed 13 billion yen ($110 million) of equity in net income from the recorded music joint venture for the quarter.