By Pierre Bertrand


Universal Music Group shares rose Thursday after the record label reported a rise in 2023 earnings, driven by subscription revenue, and outlined cost-saving measures.

At 1004 GMT shares traded 6% higher at EUR28.15.

Universal said late Wednesday that revenue for the fourth quarter of last year came to 3.21 billion euros ($3.48 billion), which came about 7% higher than Jefferies' expectation, analyst Andrew Uerkwitz said in a research note, adding that the company's music publishing revenue performed well, growing 15% at constant currency.

The company's recorded-music division also performed better than expected due to stronger physical and licensing revenue, which benefited from touring and demand for vinyls, Uerkwitz said.

Adjusted earnings before interest, taxes, depreciation and amortization for 2023 came in line with expectations, though Universal's adjusted Ebitda margin of around 21% slightly missed UBS's growth estimate, analyst Adam Berlin said in a research note.

The company's adjusted Ebitda margin in 2023 improved 1.2% on year when excluding one-off items, Deutsche Bank's Silvia Cuneo says in a research note.

"Adjusted Ebitda margins remain in focus, but with a restructuring announced, UMG is reaffirming its ability to focus on reaching mid-20s Adjusted Ebitda margins in the coming years," Uerkwitz said.

Universal's momentum in paid streaming, combined with its cost savings, will help the company achieve free cash flow growth to more than EUR2 billion by 2025, UBS said.


Write to Pierre Bertrand at pierre.bertrand@wsj.com


(END) Dow Jones Newswires

02-29-24 0546ET