New releases from the likes of Danity Kane and Mana failed to match last year's recordings from James Blunt and Faith Hill. CEO Edgar Bronfman Jr. tried to point to digital sales, which almost doubled to 12.2% of total revenue, as a bright spot. But the real savior was the $13 million the label recieved from a lawsuit against online file-sharing service Kazaa. Without that WMG would have lost $1 million in that 3 month period alone.
"Revenue was a little lighter than expected,'' Eric Handler, a Lehman Bros. analyst told Bloomberg and rated the stock "neutral". He estimated revenue at $860 million for a loss of 2 cents a share, excluding one-time items. "Digital was quite strong - they're outpacing the market on that,'' Handler said, but said CD sales were "quite weak".