Live Nation Reports Loss, Has Optimistic Outlook
Concert and ticketing giant Live Nation was weighed down by costs in the fourth quarter because of the departure of its chairman, Irving Azoff, and associated shortfalls with the Artist Nation management business he ran.
The company reported a loss of $158.7 million, including $5.5 million in costs directly from Azoff's departure and another $62.7 impairment charge on Asoff's Artist Nation. However, adjusted operating income came in at $62.5 million, just a hair shy of some analyst estimates.
Underneath this cloudy headline is some bright news: Live Nation's core business, concert tickets, is very good. It is also focused on building a more efficient, mobile, higher-margin ticketing platform.
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Live Nation's revenue rose to $1.44 million, beating expectations. Attendance per event increased 14 percent in the fourth quarter and revenue per attendee grew 25 percent.
The ticketing segment was better than expected, offset by weaker-than-expected performance at concerts, wrote Stifel analyst Benjamin Mogil, who has a "hold" on the stock.
CEO Michael Rapino has an optimistic outlook for the company, and it's not just because he's investing in new technology. Ticket sales and the tour lineup this year are both very promising. Live Nation has sold 9 million concert tickets so far this year, up 58 percent from last year.
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"From both our results and what the fans are saying, live events continue to show they are inherently non-duplicatable, in high demand and globally transferable," Rapino said on the earnings call.
Rapino said he aims to grew operating income by 35 percent over the next two years by implementing better Ticketmaster technology, expanding in Asia and Latin America, holding more music festivals and offering more country music.
Wedge Partners' Martin Pyykkonen issued a note saying that Live Nation's dynamic pricing system is leading to higher ticket sales value and boosting concert revenue.
"We continue to think there is a relatively better macroeconomic outlook for discretionary spending with several leading artists touring this summer, and Live Nation is making progress on dynamic ticket pricing to maximize ticket sales volume towards filling the house," he wrote.
—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin