SM Entertainment’s Strong Earnings Place It Atop Music Stocks In Down Week Overall
Written by djfrosty on August 4, 2023
SM Entertainment’s second quarter earnings, which were announced Wednesday (Aug. 2), helped shares of the K-pop music company, home to such acts as NCT Dream and Red Velvet, gain 7.6% to 137,700 won ($105.59) this week. That made it the top performer of the 21 stocks in the Billboard Global Music Index this week.
The index fell 1.9% to 1,360.05 in a week in which stocks were broadly down around the world. In the United States, the S&P 500 and Nasdaq composite fell 2.3% and 2.8%, respectively, marking their worst weeks since March. The FTSE 100 in the United Kingdom declined 1.7%. South Korea’s KOSPI composite index declined 0.2%.
The return of the concert business helped SM Entertainment revenues grow 30% to 239.8 billion won ($184 million), beating the 20.3% year-over-year improvement in the first quarter of 2023. SM artists had 60 concerts in the second quarter compared to six in the prior-year period. Merchandise revenue jumped 75% from sales increases from pop-up retail stores related to album releases. The day before SM announced earnings, the company’s shares got a 3.1% boost from Tuesday’s announcement that it had combined its North American operations with the U.S. operations of Kakao Entertainment, which acquired a 40% stake in SM in March.
Most of the companies that reported earnings this week saw their share prices decline week-over-week, though. Believe dropped 5.4%, SiriusXM fell 5.5% and Deezer lost 7.1%. Shares of Reservoir Media were unchanged.
Another K-pop company, HYBE, was one of just five of the index’s 21 stocks in positive territory this week. Shares of HYBE, which will report second-quarter earnings on Tuesday (Aug. 8), improved 5.2% to 272,000 won ($208.58). iHeartMedia, which also reports earnings on Tuesday, gained 6.9%.