Warner Music posts surprise loss, shares tumble

Warner Music Group Corp reported on Tuesday a surprise quarterly loss as higher interest expense and operating costs cut into the record label's margins. The company said the shrinking demand for CD's and the weak economy hurt its revenue and are likely to affect future results. Shares dropped as much as 22 per cent. "Fiscal 2010 is likely to be another challenging year," said Steve Macri, chief financial officer of Warner Music, on a call with analysts. Macri said the company's results would likely continue to be pinched by the volatile global economy and transition in the music industry. The world's third-largest music company posted a net loss of $18 million, or 12 cents a share, for the fiscal fourth quarter ended Sept 30, compared with a year-earlier profit of $6 million, or 4 cents a share. Revenue rose 1 per cent to $861 million, ahead of analyst forecasts, boosted primarily by growth in Japan, France and Germany.