AMSTERDAM (Reuters) -Universal Music Group NV (UMG), the largest record label, on Thursday reported better than expected third-quarter core earnings due to a legal settlement, though streaming revenue growth slowed.
The company said top sellers in the quarter included Korean pop band BTS, BLACKPINK, Ado, INI and Morgan Wallen.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were 539 million euros ($538 million), compared with 426 million euros in the third quarter of 2021.
Analysts had forecast EBITDA at 524 million euros, according to Refinitiv data.
Revenue rose 13.3% to 2.66 billion euros, with streaming and subscription revenue up 7.7%. The revenue figure included a 71 million euro benefit due to the settlement of a copyright infringement lawsuit, which also influenced EBITDA.
“Although still healthy, the slower revenue growth relative to the first half of this year was largely timing-related,” Chief Financial Officer Boyd Muir said on a post-earnings call.
He noted the third quarter of 2021 had “included new releases from Billy Eilish and from Drake, as well as a significant Olivia Rodrigo carryover.”
Ad-supported streaming revenues had slowed “consistent with worldwide advertising trends, which continue to impact this part of our business, “he said.
UMG, which competes against Warner Music Group and Sony, was spun out of France’s Vivendi in 2021.
Shares closed down about 1% at 20.78 euros in Amsterdam, after surging more than 10% earlier this week on news Apple had raised prices for its Apple Music streaming service.
Universal, whose artists include Taylor Swift and Justin Bieber, receives a cut of royalties when their music is streamed on Apple Music or other streaming platforms like Spotify.
($1 = 1.0020 euros)
(Reporting by Toby Sterling; editing by David Evans, Bernadette Baum and Jonathan Oatis)
