Warner Music Group (NASDAQ:WMG) Reaches New 1-Year Low Following Weak Earnings

Warner Music Group Corp. (NASDAQ:WMG)’s stock price reached a new 52-week low during mid-day trading on Thursday following a weaker than expected earnings announcement. The company traded as low as $26.36 and last traded at $26.66, with a volume of 58965 shares changing hands. The stock had previously closed at $30.09.

The company reported $0.07 EPS for the quarter, missing analysts’ consensus estimates of $0.28 by ($0.21). The company had revenue of $1.48 billion for the quarter, compared to the consensus estimate of $1.52 billion. Warner Music Group had a return on equity of 79.01% and a net margin of 8.07%. Warner Music Group’s quarterly revenue was down .7% compared to the same quarter last year. During the same quarter in the previous year, the company earned $0.18 earnings per share.

Warner Music Group Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Tuesday, March 4th. Shareholders of record on Monday, February 24th were given a $0.18 dividend. This represents a $0.72 annualized dividend and a yield of 2.64%. The ex-dividend date was Monday, February 24th. Warner Music Group’s dividend payout ratio (DPR) is 73.47%.

Analyst Upgrades and Downgrades

WMG has been the subject of a number of recent analyst reports. Morgan Stanley decreased their price objective on Warner Music Group from $32.00 to $31.00 and set an “equal weight” rating for the company in a report on Friday. Guggenheim lowered their price target on Warner Music Group from $40.00 to $37.00 and set a “buy” rating on the stock in a report on Friday. UBS Group decreased their target price on shares of Warner Music Group from $41.00 to $38.00 and set a “buy” rating for the company in a research report on Friday. Citigroup raised shares of Warner Music Group from a “neutral” rating to a “buy” rating and raised their target price for the company from $34.00 to $42.00 in a research note on Friday, February 14th. Finally, Barclays decreased their price objective on shares of Warner Music Group from $31.00 to $28.00 and set an “equal weight” rating for the company in a report on Friday. Two research analysts have rated the stock with a sell rating, six have issued a hold rating and nine have given a buy rating to the stock. According to MarketBeat.com, the stock presently has an average rating of “Hold” and an average target price of $34.88.

Insider Buying and Selling

In related news, EVP Timothy Matusch sold 1,103 shares of the firm’s stock in a transaction that occurred on Friday, February 14th. The shares were sold at an average price of $36.49, for a total transaction of $40,248.47. Following the completion of the sale, the executive vice president now directly owns 88,649 shares in the company, valued at approximately $3,234,802.01. This trade represents a 1.23 % decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, Director Valentin Blavatnik sold 28,230 shares of the company’s stock in a transaction that occurred on Thursday, February 20th. The shares were sold at an average price of $35.45, for a total transaction of $1,000,753.50. Following the completion of the transaction, the director now owns 68,264 shares in the company, valued at approximately $2,419,958.80. This represents a 29.26 % decrease in their position. The disclosure for this sale can be found here. In the last 90 days, insiders sold 30,333 shares of company stock valued at $1,072,432. Company insiders own 72.21% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of the company. Patriot Financial Group Insurance Agency LLC boosted its stake in shares of Warner Music Group by 3.4% in the 4th quarter. Patriot Financial Group Insurance Agency LLC now owns 12,269 shares of the company’s stock valued at $380,000 after purchasing an additional 408 shares in the last quarter. Fifth Third Bancorp boosted its position in Warner Music Group by 10.6% in the first quarter. Fifth Third Bancorp now owns 4,388 shares of the company’s stock valued at $138,000 after buying an additional 421 shares in the last quarter. Keystone Financial Services grew its stake in Warner Music Group by 4.4% during the fourth quarter. Keystone Financial Services now owns 10,336 shares of the company’s stock worth $320,000 after buying an additional 432 shares during the last quarter. Rosenberg Matthew Hamilton increased its holdings in Warner Music Group by 14.0% during the 4th quarter. Rosenberg Matthew Hamilton now owns 3,705 shares of the company’s stock valued at $115,000 after purchasing an additional 455 shares in the last quarter. Finally, Capital International Ltd. CA raised its holdings in shares of Warner Music Group by 0.4% in the fourth quarter. Capital International Ltd. CA now owns 117,095 shares of the company’s stock valued at $3,630,000 after buying an additional 479 shares during the last quarter. Hedge funds and other institutional investors own 96.88% of the company’s stock.

Warner Music Group Price Performance

The company has a market capitalization of $14.21 billion, a price-to-earnings ratio of 27.87, a price-to-earnings-growth ratio of 1.03 and a beta of 1.32. The company has a quick ratio of 0.67, a current ratio of 0.69 and a debt-to-equity ratio of 5.67. The stock’s 50-day moving average price is $30.70 and its 200-day moving average price is $31.68.

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.