Warner Music Group revenue slipped 8% in the first three months of 2012 to $628 million from $684 million in 2011. The company did more with less, however, as operating income before depreciation and amortization rose 4% to $85 million and net loss improved slightly to $36 million from a net loss of $38 million in the same period last year.
Revenue at Warner’s recorded music division fell 9% to $503 million while its music publishing division posted a drop in revenue of 7% to $128 million.
Warner Music Group Spent Less, Revenue Remained Flat in Holiday Quarter
Warner blamed the lighter revenue on a “light release schedule” and “continued physical revenue declines in the recorded music industry” that were partially offset by growth in recorded music digital and non-traditional income. The company did not break out non-traditional income in the quarter.
Cash from operating activities increased to $121 million from $106 million. Free cash flow – which also takes into account cash from investing and financing activities – rose to $103 million from $46 million.
The company posted strong digital gains, especially in the U.S. Digital revenue, which represented a 44.1% share of recorded music revenue while domestic digital revenue represented 58.3% of revenue. Total recorded music digital revenue increased 7% to $235 million and accounted for 37.4% of revenue, up from $220 million and 32.1% of revenue last year. Publishing digital revenue sank 18% from the same period in 2011 due to timing of collections and last year’s one-time settlement with record labels.