Sphere Entertainment Shares Soar on Positive Quarterly Results, Besting All Music Stocks
Written by djfrosty on August 16, 2024
Sphere Entertainment Co. shares spiked 22.3% this week after the company’s fiscal fourth-quarter earnings on Wednesday (Aug. 14) showed that the Las Vegas venue brought in $151 million in the quarter and $489 million in its first three full quarters of operation. Total revenue of $273 million — a figure that includes MSG Networks — was in line with analyst estimates while earnings per share beat estimates.
During Wednesday’s earnings call, CEO James Dolan said the company is learning how to get the most out of the $2.3 billion venue with not just concerts but corporate and sporting events and Sphere’s current cash cow, motion pictures. “Our plan for Sphere is to create widespread demand for our offerings and drive utilization far in excess of traditional venues,” Dolan said.
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After hosting residencies by U2, Phish and Dead & Company, Sphere will begin a string of concerts by the Eagles from September to November and will host its first EDM events in December with Italian producer Anyma. Dolan didn’t provide specifics about additional residencies but said to expect an artist in “the country category” in 2025.
LiveOne’s shares rose 16.3% this week after the Los Angeles-based music streamer announced its fiscal first-quarter earnings on Tuesday (Aug. 13). A 29% increase in paid members, to 653,000, helped revenue improve 19% to $33.1 million from $27.8 million in the year-ago period. Adjusted earnings before interest, taxes, depreciation and amortization jumped 31% to $2.9 million.
The 20-company Billboard Global Music Index (BGMI) fell 0.7% to 1,780.54 despite most of the stocks gaining and the market enjoying one of its best weeks of 2024 thanks to a host of positive news. Driven by stronger-than-expected retail sales data on Thursday (Aug. 15) and encouraging inflation news earlier in the week, the tech-heavy Nasdaq rose 5.3% to 17,631.72 and the S&P 500 finished its best week of the year, gaining 3.9% to 5,524.25.
The BGMI’s largest companies fell in the middle of the pack. Live Nation shares were up 3.2% to $95.18 and Universal Music Group rose 0.9% to 22.35 euros ($24.66). Among the losers were Warner Music Group, down 0.4% to $28.22, and Spotify, down 0.7% to $337.38.
Stock gains were seen globally. In the United Kingdom, the FTSE 100 rose 1.8% to 8,311.41. South Korea’s KOSPI composite index jumped 4.2% to 2,697.20. China’s Shanghai Composite Index edged up 0.6% to 2,879.43.
Tencent Music Entertainment (TME) dropped 18.8% this week following its second-quarter earnings release on Tuesday (Aug. 13). TME revenues were 1.7% lower as gains in music were overshadowed by losses in social entertainment. Despite the sharp decline, TME shares are still up 16.9% year-to-date.
TME’s latest quarterly results weren’t unlike those that preceded it, with strong music subscription growth at music apps QQ Music, Kugou Music and Kuwo Music helping offset a decline at its karaoke business. While music average revenue per user grew 10% and TME finished the quarter with 117 million music subscribers, the company’s weak guidance on future subscriber growth likely caused its share price to fall.
JYP Entertainment’s 11.3% decline following its second-quarter earnings results marked the second-worst performance for BGMI stocks. The K-pop company’s revenue dropped 37% due to an 82% decline in album sales. Other K-pop companies experienced lighter declines: HYBE fell 3.4%, SM Entertainment slipped 3.8% and YG Entertainment dropped 1.3%. Those losses deepened the K-pop companies’ already significant losses in 2024. Year to date, the four South Korean companies have lost an average of 34.8% while the KOSPI composite index has gained 1.6%.