Warner Music Group Corp WMG stock fell in Thursday’s premarket session after reporting fiscal fourth-quarter 2024 results.

GAAP EPS of $0.08 missed the analyst consensus estimate of $0.27. Revenue grew 2.8% year-on-year to $1.63 billion, beating the analyst consensus estimate of $1.59 billion.

Recorded Music revenue grew by 4.0% Y/Y at $1.34 billion in the quarter. Music Publishing revenue decreased by 1.0% Y/Y to $295 million. Digital revenue remained flat Y/Y at $1.07 billion.

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Adjusted OIBDA increased by 11.4% compared to the previous year, reaching $353 million, and the margin improved by 170 basis points to 21.7%, driven by strong operating performance and savings from the company’s restructuring plans.

Warner Music held $694 million in cash and equivalents as of September 30, 2024. It generated $304 million in operating cash flow, down from $338 million in the prior-year quarter.

CEO Robert Kyncl said that Warner Music Group demonstrated its strength and adaptability this quarter and year, thriving in a dynamic, fast-paced market.

The company continues to evolve, focusing on simplicity and impact to enhance its ability to attract and support original artists and songwriters at every stage of their careers, enabling them to achieve their musical visions and build devoted fanbases.

CFO Bryan Castellani said the results highlight the diversity and resilience of Warner Music Group’s business. Strong streaming performance, driven by positive industry trends and disciplined cost management, generated robust cash flow. The company is optimistic about future opportunities and committed to delivering impactful, culture-shaping music in 2025 and beyond.

In October, BofA Securities analyst Jessica Reif Ehrlich downgraded Warner Music Group to Underperform, lowering the price target from $33 to $30.

The revised valuation reflects a 12x calendar year 2025 OIBDA multiple, a 25% premium to the media and entertainment sector coverage.

Despite secular tailwinds like pricing and penetration, growth potential remains limited due to streaming volatility and one-time factors.

Strategic shifts under CEO Robert Kyncl bring long-term potential but introduce execution risks, including leadership changes and restructuring impacts.

Price Action: WMG stock was down 2.84% to $32.71 at the last check on Thursday.

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Photo by Busition via Wikimedia Commons