NEW YORK — Warner Music Group, home to Linkin Park, Green Day and Madonna, reported a narrower quarterly loss on recorded music after a year of deep cost-cutting and improved digital music sales.
The independent music group, reporting publicly for the first time, posted a loss of $35 million, or 28¢ a share, on revenues of $767 million compared with a loss of $48 million a year earlier.
Company, which includes the Warner Bros., Atlantic and Reprise record labels, would have turned a $4 million profit before accounting for the value of stock warrants given to its former parent company.
Topper Edgar Bronfman Jr. told Wall Street that the results reflect the benefits of restructuring, which reduced the number of CD releases by 50% from last year and saved an estimated $250 million.
“The vast majority of our savings were captured in the second quarter of the year,” Bronfman said.
Company has laid off more than 1,000 employees since restructuring began nearly a year ago. Bronfman said WMG is streamlining its approach to identify and sign major acts at a lower cost.
Bronfman led a group of equity investors that bought the music group from Time Warner for $2.6 billion last year.
WMG filed for an initial public offering in May; management discussed second-quarter results Monday after an SEC-mandated quiet period expired.
The music industry is still suffering the affects of a lengthy slump, but Bronfman said Warner is down less than the music industry as a whole. WMG saw sales dip 3% from last year, while the music biz overall fell 7%.
On the positive side, Bronfman said illegal peer-to-peer activity decreased by half over the last year and WMG’s $35 million in sales of digital music was greater than the $32 million sold all of last year.
“The potential of digital distribution is increasingly being reflected in real-world success,” Bronfman said.
About 60% of digital revenues were earned through download sales, mostly in the U.S., while 40% was earned through sales of ringtones, mostly in Europe.
Company earned 53% of its revenue abroad, in part due to sales boosted by the weak dollar.
Bronfman told analysts he believes Warner is at no disadvantage as a much smaller entity no longer controlled by a large media conglom.
“We are competitive with Universal and Sony BMG in signing artists,” he said. “We are perfectly able to compete in the marketplace.”
Shares closed down Monday nearly 2% to $16.65 on the New York Stock Exchange. Shares are still trading below WMG’s initial public offering at $17 in May.