Warner Music Group (NASDAQ:WMG) Releases Earnings Results, Misses Estimates By $0.30 EPS

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) posted its quarterly 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. Warner Music Group had a return on equity of 39.95% and a net margin of 4.59%. The business had revenue of $1.69 billion for the quarter, compared to analyst estimates of $1.59 billion. During the same period last year, the firm posted $0.27 EPS. Warner Music Group's quarterly revenue was up 8.7% on a year-over-year basis.

Warner Music Group Stock Performance

Shares of NASDAQ WMG traded up $0.56 during mid-day trading on Friday, hitting $31.71. The company had a trading volume of 2,555,874 shares, compared to its average volume of 2,197,894. The company has a market capitalization of $16.53 billion, a price-to-earnings ratio of 55.63, a P/E/G ratio of 1.18 and a beta of 1.26. Warner Music Group has a 1 year low of $25.56 and a 1 year high of $36.64. The company has a current ratio of 0.66, a quick ratio of 0.64 and a debt-to-equity ratio of 5.37. The stock's 50-day moving average price is $28.64 and its 200-day moving average price is $30.13.

Warner Music Group Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Wednesday, September 3rd. Shareholders of record on Wednesday, August 20th will be given a $0.19 dividend. This is an increase from Warner Music Group's previous quarterly dividend of $0.18. This represents a $0.76 dividend on an annualized basis and a yield of 2.4%. The ex-dividend date of this dividend is Wednesday, August 20th. Warner Music Group's dividend payout ratio (DPR) is 82.76%.

Analyst Ratings Changes

A number of brokerages have issued reports on WMG. Citigroup reaffirmed a "buy" rating and issued a $34.00 target price (down previously from $35.00) on shares of Warner Music Group in a report on Thursday, May 29th. JPMorgan Chase & Co. increased their price target on Warner Music Group from $32.00 to $33.00 and gave the company an "overweight" rating in a research note on Monday, July 7th. Sanford C. Bernstein increased their price target on Warner Music Group from $32.00 to $34.00 and gave the company an "outperform" rating in a research note on Thursday, July 3rd. Wolfe Research raised Warner Music Group to a "strong-buy" rating in a research note on Thursday, May 8th. Finally, Morgan Stanley decreased their price target on Warner Music Group from $32.00 to $31.00 and set an "equal weight" rating for the company in a research note on Friday, May 9th. Ten equities research analysts have rated the stock with a hold rating, nine have given a buy rating and one has given a strong buy rating to the company's stock. According to MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $33.83.

Hedge Funds Weigh In On Warner Music Group

Hedge funds have recently made changes to their positions in the stock. Goldman Sachs Group Inc. boosted its stake in Warner Music Group by 5.6% during the first quarter. Goldman Sachs Group Inc. now owns 948,741 shares of the company's stock valued at $29,743,000 after buying an additional 50,035 shares during the period. Royal Bank of Canada boosted its stake in Warner Music Group by 10.2% during the first quarter. Royal Bank of Canada now owns 77,162 shares of the company's stock valued at $2,420,000 after buying an additional 7,119 shares during the period. Finally, Amundi boosted its stake in Warner Music Group by 120.7% during the first quarter. Amundi now owns 7,496 shares of the company's stock valued at $232,000 after buying an additional 4,100 shares during the period. 96.88% of the stock is currently owned by hedge funds and other institutional investors.

About Warner Music Group

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.

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