Warner Music Group (WMG) First Quarter Earnings and Revenue Increase Year Over Year – February 9, 2022

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Warner Music Groupit is (WMG Free Report) first-quarter 2022 adjusted earnings of 36 cents per share were up 100% year-over-year.

Zacks consensus estimate for earnings was pegged at 29 cents per share

Revenue of $1.61 billion beat Zacks’ consensus estimate by 7.3% and was up 21% year over year.

Regionally, revenue from the United States (44.8% of revenue) increased 26.4% year-over-year to $723 million. International revenue (55.3% of revenue) increased 16.8% year-over-year to $892 million.

Front line details

Total streaming revenue increased 22.8% year-over-year (23.6% at constant currency) to $965 million, driven by growth in recorded music and streaming. music publishing, including revenues from emerging streaming platforms.

Recorded music revenue of $1.386 billion was up 19.4% year over year.

Music publishing revenue grew 30.9% year over year to $229 million.

Digital revenue (62.1% of revenue) recorded $1.002 billion in the quarter under review, up 21.5% year-over-year.

Operation details

In the first quarter, adjusted OIBDA rose 25.9% year-over-year to $355 million. Adjusted OIBDA margin increased by 90 basis points (bps) year on year to 22% due to strong operational performance.

Adjusted EBITDA increased 31% year over year to $389 million. EBITDA margins increased by 190 basis points to 24.1%.

Selling, general and administrative expenses increased 24% year over year to $497 million

Adjusted operating profit increased 29.9% year-over-year to $274 million in the quarter under review.

Balance sheet

As of December 31, 2021, Warner Music Group had cash and cash equivalents of $450 million, compared to $499 million as of September 30, 2021.

Free cash flow in the reported quarter was $95 million compared to free cash flow of $193 million in the prior quarter.

As of December 31, 2021, the company had total debt of $3.85 billion and net debt of $3.40 billion.

Zacks Ranking and Other Stocks to Consider

Warner Music Group currently wears a Zacks rank #4 (sell).

Some top-ranked stocks in the Zacks Consumer Discretionary sector are Cedar Fair (FUN free report) and Crocodile (CROSS Free Report), both sporting a Zacks Rank #1 (Strong Buy), and Gildan Sportswear (GIL Free Report), wearing a Zacks Rank #2 (Buy). You can see the full list of today’s Zacks #1 Rank stocks here.

Cedar Fair is expected to report its fourth quarter 2021 results on February 16.

FUN is up 35.9% over the past year, against a 3.3% decline in the Zacks Hobby & Recreational Services industry and a 22.5% drop in the Consumer Discretionary sector.

Crocs is expected to report its fourth quarter fiscal 2021 results on February 16.

CROX is up 31.3% over the past year, versus the Zacks Textile – Apparel industry’s 7% decline and the Consumer Discretionary sector’s 22.5% drop over the past year.

Gildan Activewear is expected to announce its fourth quarter 2021 results on February 23.

The GIL is up 48.4% over the past year against the 7% drop in the Zacks Textile – Apparel industry and the 22.5% drop in the Consumer Discretionary sector.

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