POLYGRAM STUMBLES
Conglom's film woes lead to 2% dip in 1st qtr.
The company had net income of $66 million in the quarter, compared with $67 million in the year-ago period. Per-share earnings were unchanged at 37¢. Revenues climbed 8% to $1.19 billion from $1.09 billion. All figures were converted from Netherlands guilders into U.S. dollars at the rate of NLG 1.85 to the dollar.
'Pop' the answer
Music sales grew by 9% and operating income by 19%, thanks to discs such as U2's "Pop," the company's bestselling album during the quarter, with sales of nearly 5 million units worldwide. (Its domestic tally is about 1 million units.) Sheryl Crow's self-titled sophomore disc has been on the U.S. charts since August and has logged more than 3 million in worldwide sales.
A restructuring in the label ranks, an overhaul at Motown Records, changes in its European music distribution operation and reductions in overhead also contributed to the bottom line.
Also contributing to the music results were new discs by the Bee Gees (which has done well overseas but has yet to catch fire domestically), Warren G and Texas (which has not yet been released in the U.S.). Local artists such as Italy's Andrea Bocelli, Holland's Marco Borsato and Hong Kong's Jacky Cheung also performed well.
Polygram expects to release new albums from established artists Shania Twain, 311, Blues Traveler, Jon Bon Jovi, Boyz II Men and Elton John during the remainder of the calendar year.
Polygram Filmed Entertainment sales rose by 2% in the quarter, but the division reported a loss of $30 million, due largely to the poor box office receipts from "Portrait of a Lady" and "Gridlock'd." PFE released four films in the U.S., compared to seven the year before.
"Management believes full-year results from the film division will be satisfactory, bearing in mind the start-up costs of entering U.S. mainstream theatrical distribution and the fact that the film release schedule is weighted to the second half of the year," Polygram president Alain Levy said in a statement.
Big second-half pics
Among the company's important second-half releases are "The Game," starring Michael Douglas and Sean Penn; "The Borrowers," starring John Goodman; and "Bean," starring Rowan Atkinson.
Levy told shareholders the company "was comforted" by the international success of "Sleepers," which has grossed $100 million outside the U.S. Polygram holds the non-U.S. rights to the film. It was also pleased by the two Oscars for "Fargo" and the best docu Oscar for "When We Were Kings," he said.
In Europe, Polygram's sales grew by 9% with help from strong music performances in Germany and Italy, the third- and 10th-largest music markets, respectively.
A better music release schedule and a stronger dollar contributed to a 12% sales increase in North America.
