Increased concert attendance drove record third quarter revenue at Live Nation. The company turned in revenue of $2.26 billion in the quarter, up 15% from the prior-year quarter. Adjusted operating income (AOI), a metric that excludes certain one-time items, rose 9% to $221.2 million.
Live Nation CEO Michael Rapino called the third quarter "the best quarter in the company's history," and the three quarters of 2013 "the best nine months for revenue and AOI for the company." The bottom line didn't improve, however. Net income was $43.8 million, down from $57.9 million a year earlier. Net income was dragged down by a $36.2 million loss on debt extinguishment.
Analysts expected revenue of $2.09 billion and earnings per share (EPS) of 14 cents, according to Bloomberg. In the quarter, Live Nation's EPS was 22 cents. Shares of Live Nation were down 2.6% in after-hours trading following the earnings release. They finished the day down 1.1% to $19.40, just off the 52-week high of $19.79 set Thursday.
To the extent Live Nation is a bellwether, the concert business appears to be in fine shape. Consumers are reacting positively to festivals and growth genres -- namely EDM and country -- and continue to spend on concerts in spite of low youth employment and stagnant wages. The concert business started to emphasize value after the dismal summer of 2010. Live Nation's most recent quarter suggests music fans have responded positively.
In the concert division, revenue grew 21% to $1.73 billion and AOI grew 44% to $70.7 million. Concert attendance rose 26.7% to 21.2 million from 16.7 million in the third quarter of 2012. North American concert attendance rose 27.4% to 14.8 million. International concert was up 25% to 6.4 million. Concert revenue accounted for 76.3% of revenue in the quarter and 32% of AOI.
During the earnings call, Rapino explained concert growth was fueled by two factors. First, both the U.S. and Europe were "firing on all cylinders" after Europe struggled a year ago. The international segment of the concerts division increased attendance by 1.3 million attendees, with most of the gain coming from arena shows. Second, Rapino said the company was successful in using marketing and social marketing to improve attendance per concert. Although global events declined 1.9% in the third quarter, attendance per event rose 29.1%.