Universal Music Shares Plunged 24% After Quarterly Earnings Revealed Subscription Growth Slowdown

Slowing growth in subscription streaming sent Universal Music Group’s share price down 23.5% following the company’sOn Thursday , UMG shares dropped as far as 19.93 euros , 29.8% below Wednesday’s closing price, before closing at 21.70 euros – a 23.5% decline that erased 12.2 billion euros from UMG’s market capitalization. Investors were reacting to a marked slowdown in streaming revenue in UMG’s recorded music division: In the second quarter, music subscription revenue grew 6.9%.

Despite the streaming slowdown, UMG managed to improve both top-line revenue and margins. Overall revenue grew 8.7% to 2.93 billion euros . As a percentage of revenue, adjusted earnings before interest, taxes, depreciation and amortization improved to 22.1% from 21.9% in the prior-year period. Physical music sales grew 14.4% and merchandise sales jumped 43.7%.

Many analysts lowered their price targets following Wednesday’s results, albeit by smaller margins than investors dropped the share price on Thursday. Guggenheim dropped UMG by 14% to 27.50 euros . Barclays lowered its price target by 12% to 26.00 euros . Citi lowered UMG by 7.8% to 29.50 euros . And Kepler Cheuvreux reduced its price target 3.5% to 27.00 euros .

United States United States Latest News, United States United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Universal Music Group loses $16B in market value, plunging 24% after weak streaming revealUniversal Music Group’s stock plunged 24%, erasing more than $16 billion in market value after it revealed its revenue growth fell below expectations.
Source: nypost - 🏆 91. / 67 Read more »

Universal & Warner Music Shares Show Modest Gains Amid Stock Market SlideWarner Music and Universal Muisc shares gained even as stock markets fell this week. Elsewhere, Spotify shares fell for a second consecutive week.
Source: billboard - 🏆 112. / 63 Read more »

Chipotle Mexican Grill is about to report earnings. Here's what to expectShares of Chipotle have risen 24% this year, bringing its market value up to $72.82 billion.
Source: CNBC - 🏆 12. / 72 Read more »