Profit Picture Improves for EMI

Two scuttled mergers in the past year haven't damaged the profit picture for EMI Group PLC. Neither has a global slowdown in music sales. EMI announced May 22 that it expects to see a 5.7% increase in pretax profits for its fiscal year ended March 31: £259.5 million (US $374 million), up from £245.4 million (US $353 million) a year earlier. EMI's sales for the year rose 12% to £2.67 billion (US $3.84 billion).

It's not coincidental that the company's North American market share has grown from 9% last year to 10.8% at present. EMI's share of the world market now stands at 14.1%, up from 12.5% last year. Company executives expressed confidence in further gains, despite an overall negative trend for the music industry. EMI's happy news caused its stock to rise from £4.39/share to £4.52/share (US $6.51/share) on the London Stock Exchange.

Last year, EMI was engaged in prolonged merger discussions with Warner Music Group, which were abandoned when WMG's parent company Time Warner was purchased by America Online. Later, German media conglomerate BMG courted EMI, to the disapproval of European Union commissioners. In both cases, the commissioners had expressed fear that the resulting company would amount to a monopoly of the European market for recorded music. "We will proceed as an independent, music-focused group," said EMI chairman Eric Nicoli. "Clearly there is a focus now on pursuing our strategy as a stand-alone business."

In pop music genres, strong sellers for EMI include Lenny Kravitz, Janet Jackson, and Garth Brooks. The label recently signed pop diva Mariah Carey and rock icons the Rolling Stones, while the Beatles continue to perform well in the marketplace. EMI will continue to seek acquisitions among smaller independent music labels based in the United Kingdom, according to reports from London.