Warner Music Group recorded revenues of $1.05bn for the fourth quarter of 2017 – its fiscal Q1 – up 14% year-on-year. Its digital revenues grew by 20% to $533m as part of that – 51% of the total.
We have to note, also, that WMG's operating income fell by 4% to $90m, while its net income dropped 79% to $5m, compared to Q4 2016's $24m – that's the result of a $27m non-cash tax expense related to new US tax legislation in part.
EVP and CFO Eric Levin in a statement commented:
This marks the first time in over 10 years that our quarterly revenue has exceeded a billion dollars.
CEO Steve Cooper also added:
2018 is off to a great start. For three years running, we have grown revenue by double digits in the first quarter, a great testament to the sustainability of our success. Streaming is driving the industry and we continue to outperform thanks to fantastic new music and the strength of our worldwide operating team.
And about the drop in operating income he said:
Largely the result of higher variable compensation expense, related to the Company’s deferred compensation plan, increased investment in A&R, the impact of a legal settlement in the prior-year quarter, costs associated with management changes and restructuring, and an increase in facilities costs due to overlap in rent associated with the Company’s Los Angeles headquarters consolidation.
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