Universal Music Group’s market value fell by approximately $16.38 billion after the record label behind Taylor Swift, Billie Eilish, and Ariana Grande reported revenue growth from subscriptions and streaming services that were far lower than experts expected.
Shares in Amsterdam fell more than 25% on Thursday, reducing the group’s market value to around 36.80 billion euros ($39.90 billion), according to FactSet. Universal’s market worth was approximately EUR52 billion on Wednesday.
Universal Music Group company reported
The world’s largest music company reported EUR2.93 billion in sales for the three months ended June 30, a 9.6% increase year on year at constant currency. Visible Alpha’s consensus forecasts showed that analysts expected revenue of EUR2.89 billion.
However, revenue from subscriptions and streaming increased only 4.1%, far below analysts’ expectations of more than 10%.
Subscription and streaming services exploded during the pandemic as listeners resorted to digital platforms to enjoy their favorite performers after coronavirus regulations forced live concerts to halt. However, growth has cooled in recent years.
Muir noted that last-minute deal modifications put additional pressure on income. Meta Platforms no longer licenses premium music videos from Universal as of May and the record label lost some revenue during its months-long dispute with TikTok.
Universal’s physical revenue, which includes CD and vinyl sales, increased by more than 14% at constant currency to EUR357 million, owing to a good release schedule that boosted vinyl sales in the United States and Europe.
Taylor Swift, Billie Eilish, Seventeen, Morgan Wallen, and AE! group were among the best sellers for the quarter.
Adjusted earnings before interest, taxes, depreciation, and amortization (a key profitability metric for Universal) increased to EUR649 million from EUR590 million, resulting in a 22.1% adjusted margin.
According to Visible analysts predicted an adjusted Ebitda of EUR645.4 million. according to Visible Alpha.
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