Warner Music Group (NASDAQ:WMG) Announces Quarterly Earnings Results

Key Points

• Warner Music Group reported a quarterly earnings per share (EPS) of ($0.03), missing analysts' expectations by $0.30, despite an 8.7% year-over-year revenue increase to $1.69 billion.
• The company announced a dividend increase to $0.19 per share, reflecting a 2.4% yield, while maintaining a payout ratio of 82.76%.
• As of the latest trading session, shares of WMG rose to $31.71, with brokerages maintaining an average rating of "Moderate Buy" and a consensus price target of $33.83.

Warner Music Group (NASDAQ:WMG - Get Free Report) released its earnings results on Thursday. The company reported ($0.03) EPS for the quarter, missing analysts' consensus estimates of $0.27 by ($0.30), Zacks reports. The business had revenue of $1.69 billion for the quarter, compared to the consensus estimate of $1.59 billion. Warner Music Group had a net margin of 4.59% and a return on equity of 39.95%. The company's quarterly revenue was up 8.7% compared to the same quarter last year. During the same period in the prior year, the company posted $0.27 EPS.

Warner Music Group Stock Performance

Shares of NASDAQ WMG traded up $0.50 during mid-day trading on Wednesday, hitting $32.05. The stock had a trading volume of 953,579 shares, compared to its average volume of 1,897,976. The company has a debt-to-equity ratio of 5.37, a quick ratio of 0.64 and a current ratio of 0.66. The company has a 50 day moving average of $28.87 and a two-hundred day moving average of $30.15. Warner Music Group has a twelve month low of $25.56 and a twelve month high of $36.64. The firm has a market cap of $16.70 billion, a PE ratio of 56.19, a PEG ratio of 1.27 and a beta of 1.26.

Warner Music Group Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Wednesday, September 3rd. Investors of record on Wednesday, August 20th will be given a $0.19 dividend. This represents a $0.76 annualized dividend and a dividend yield of 2.4%. The ex-dividend date of this dividend is Wednesday, August 20th. This is a positive change from Warner Music Group's previous quarterly dividend of $0.18. Warner Music Group's payout ratio is currently 126.32%.

Institutional Investors Weigh In On Warner Music Group

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Goldman Sachs Group Inc. grew its position in Warner Music Group by 5.6% during the 1st quarter. Goldman Sachs Group Inc. now owns 948,741 shares of the company's stock worth $29,743,000 after purchasing an additional 50,035 shares during the period. Royal Bank of Canada raised its holdings in Warner Music Group by 10.2% in the 1st quarter. Royal Bank of Canada now owns 77,162 shares of the company's stock worth $2,420,000 after purchasing an additional 7,119 shares during the period. Finally, Amundi boosted its position in Warner Music Group by 120.7% during the first quarter. Amundi now owns 7,496 shares of the company's stock worth $232,000 after purchasing an additional 4,100 shares in the last quarter. 96.88% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

A number of analysts recently issued reports on the company. Redburn Atlantic upgraded Warner Music Group from a "strong sell" rating to a "hold" rating and set a $30.00 price target for the company in a report on Tuesday, July 15th. Barclays boosted their price target on Warner Music Group from $28.00 to $30.00 and gave the company an "equal weight" rating in a report on Wednesday, July 9th. Guggenheim lowered their price target on Warner Music Group from $40.00 to $37.00 and set a "buy" rating for the company in a report on Friday, May 9th. JPMorgan Chase & Co. upped their target price on Warner Music Group from $32.00 to $33.00 and gave the stock an "overweight" rating in a report on Monday, July 7th. Finally, Bank of America upgraded Warner Music Group from an "underperform" rating to a "neutral" rating and upped their target price for the stock from $28.00 to $33.00 in a report on Wednesday, July 9th. Ten analysts have rated the stock with a hold rating, nine have assigned a buy rating and one has assigned a strong buy rating to the company. Based on data from MarketBeat, Warner Music Group presently has a consensus rating of "Moderate Buy" and a consensus target price of $34.00.

Warner Music Group Company Profile

Warner Music Group Corp. operates as a music entertainment company in the United States, the United Kingdom, Germany, and internationally. It operates through Recorded Music and Music Publishing segments. The Recorded Music segment is involved in the discovery and development of recording artists, as well as related marketing, promotion, distribution, sale, and licensing of music created by such recording artists; markets its music catalog through compilations and reissuances of previously released music and video titles, as well as previously unreleased materials; and conducts its operation primarily through a collection of record labels, such as Warner Records and Atlantic Records, as well as Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Fueled by Ramen, Nonesuch, Parlophone, Reprise, Roadrunner, Sire, Spinnin' Records, Warner Classics, and Warner Music Nashville.