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February 07, 2005
EMI profit warning after CDs delay
Gorillaz, Coldplay Delayed
LONDON, England (Reuters) -- Britain's EMI, the world's third-largest music group, warned on profits Monday following delays in releasing two of its major albums.Its shares fell 15 percent in pre-trade after it said music sales would be 8 to 9 percent lower than last year. At 0930 GMT in trading in London after they were 14.3 percent down.
Profit before tax, amortization and exceptional items for the year ending March 31 will be about £138 million pounds ($259.8m), it said in a trading update -- about 17 percent lower than analyst forecasts.
"Two major albums, one by Cold Play and one by Gorillaz, originally scheduled for this financial year will now be released in the first half of the next financial year," EMI said in a statement.
"EMI Music's sales, particularly re-orders, in January have also been lower than anticipated and this is expected to continue through February and March," it added.
Paul Richards, an analyst at Numis Securities, said the market would be focusing on the slump in music sales rather than the timing of the two albums.
"It's unusual to see this much of a downgrade just because of phasing," he said.
Shares in EMI dropped 15 percent in pre-trade, with a line of 250,000 shares going through at 240 pence, down 15 percent from the stock's closing price of 281-1/4p on Friday.
At 0930 GMT they were 40.25 points down (14.3 percent) at 241.00.
Alain Levy, chairman and chief executive of EMI Music, said: "Creating and marketing music is not an exact science and cannot always coincide with our reporting periods.."
"While this rescheduling and recent softness is disappointing, it does not change my views of the improving health of the global recorded music industry," he added. [NEWS]
Posted by BIGBAER at February 7, 2005 12:35 PM
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