01:12 PM EDT, 05/09/2024 (MT Newswires) -- Warner Music Group ( WMG ) reported stronger-than-expected gains in fiscal second-quarter results on Thursday despite taking a revenue hit from its terminated distribution deal with BMG, though it warned the BMG revenue impact will be bigger in the second half of the year.

Revenue rose to $1.49 billion for the three months ended March 31 from $1.4 billion a year ago and topped the $1.48 billion average analyst estimate on Capital IQ. Earnings per share tripled to $0.18 year over year and beat the Street's $0.16 view.

By segment, recorded music revenue advanced 4% to $1.19 billion, fueled by a 7% increase in streaming. Within streaming, subscription revenue climbed 8% to $615 million while ad-supported sales moved up 4%.

The termination of a distribution agreement with BMG led to $22 million less digital revenue in recorded music compared with a year ago. Excluding the BMG termination and a license renewal that resulted in an unfavorable impact of $4 million, consolidated revenue rose 8.8%.

"Our performance in the quarter was driven by an acceleration in recorded music subscription streaming growth and continued momentum in music publishing," Chief Financial Officer Bryan Castellani said in a statement.

Castellani told analysts that the license renewal will have "a similar impact" on revenue in the third and fourth quarters while the BMG termination is expected to impact revenue by an even higher $25 million to $30 million in both quarters, according to a Capital IQ transcript. Shares of Warner Music ( WMG ) fell 6.3% in Thursday trade.

In its smaller music publishing segment, revenue jumped 19% to $306 million in the second quarter, driven by increases of 27% and 18% in digital and performance, respectively.

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