Warner Music Group's financial performance continues to fire on all cylinders as it reported net income of $67 million on revenues of $1.09 for the three month period ended March 31. That represented a substantial increase of the $1 million loss the company posted in the prior corresponding quarter, while income rose 13.2 percent from the $963 million it had during that period.
Within those results, the company said operating income grew 47 percent to $122 million from $83 million in the year earlier corresponding period. That means that its operating income margin now equals 11.1 percent of revenue, up from 8.6 percent in the year-earlier, six-month period. And then after adding back in depreciation and amortization, OIBDA, or operating income before depreciation and amortization rose 25.7 percent to $191 million from $152 million in the year earlier period.
The company attributed the increase in operating income, OIBDA and OIBDA margin due to revenue growth and lower compensation expense, slightly offset by the impact of adopting changes in accounting rules as to how it recorded revenue, which by itself decreased margin by 0.5 percentage points.
But overall, "revenue and OIBDA were both up double-digits," WMG CFO Eric Levin said in a statement. "Our cash position remains strong, with $470 million on the balance sheet at quarter-end."
For the first half of the fiscal year, WMG income also greatly improved to $153 million from $4 million in the prior year, while revenue grew 14.2 percent to $2.293 billion from almost $2.1 billion in the year earlier period.
Breaking the results down more closely, the company produced $269 million in operating income, up 55.5 percent from $173 million in that financial barometer in the year earlier corresponding period, while OIBDA was $406 million, or a 32.2 percent increase over the $307 million in the prior quarter.
"Our second-quarter results were strong," said WGM CEO Steve Cooper in a statement. "Our sustained investment in our artists and songwriters, our artist services business and our world-class operators, are delivering great results."
Looking at the company by operation, recorded music grew by 18 percent to $933 million from $791 million in the prior three month period, while operating income was up 67.5 percent to $134 million from $80 million in the prior year corresponding period. However, $51 million of the $142 million increase was due to sales from the acquisition of EMP. Without those sales, revenue grew 11.4 percent.
For the six month period, the company produced $297 million in operating income, a 42.1 percent increase over the prior year’s $209 million during the corresponding period, while revenue grew 16.4 percent to $1.974 billion from $1.695 billion.
The company said that was due to growth in digital and artist services and expanded-rights revenue. Major sellers for the quarter included TWICE, Meek Mill, The Greatest Showman soundtrack, Ed Sheeran and Cardi B.
Moving over to publishing, music revenue declined 9.2 percent to $158 million in the first three months, from $174 million in the year earlier period, mainly due to a loss of undisclosed catalogs, according to the company. Within that operating income fell 34.1 percent to $27 million from $41 million .
For the six month period, revenue was up 1.9 percent to $323 million from $317 million, while operating income grew 22.5 percent to $49 million from $40 million in the prior period.
In addition to the departing catalogs, publishing was also impacted by a decline in mechanical revenue as physical sales continue to fall.