Live Nation Posts $52.2M Q2 Profit; 70 Million Tickets Sold in 2018

UPDATE: As of Friday morning, Live Nation’s stock price was down as much as 4% during trading hours, down significantly more than the major U.S. market indexes. The selloff despite earnings that beat analyst estimates may be thanks to rumblings before the earnings call that a merger with SiriusXM could be imminent, but that didn’t materialize.  

Live Nation Entertainment on Thursday reported second-quarter profit of $52.2 million with a net income of 24 cents per share, beating analyst expectations of 19 cents per share. 

The ticket seller and concert promoter posted revenue of $2.87 billion in the period, which also beat Street forecasts. Four analysts surveyed by Zacks expected $2.85 billion.

Live Nation shares have risen 21 percent since the beginning of the year. In the final minutes of trading on Thursday, shares hit $51.60, an increase of 41 percent in the last 12 months.

The company touted operating income being up 19 percent for the quarter, at $135 million, and concert tickets sold in 2018 at nearly 70 million, up 3 million through July,  “putting us on track to have over 90 million fans attend our concerts this year,” according to a statement from Live Nation CEO Michael Rapino.

“In the second quarter, we promoted more than 9,000 shows for over 25 million fans, delivering an 11% increase in operating income, a 13% increase in AOI and 6% revenue growth,” Rapino’s statement continues. “As we previously indicated, this year will be particularly strong in our amphitheaters, with attendance up double-digits through the second quarter, and on track to grow by three million fans for the full year. Given our ability to drive high-margin on-site spending with this audience, these additional fans are highly profitable.”

Rapino explained that through pricing optimization, “We also continue to capture greater value for the artist” leading to double-digit increase in ticket prices in amphitheatres and arenas, driving an anticipated $500 million increase in revenue for the year. 

Sponsorship and advertising committed net revenue is up 12 percent through July, with festivals being key. 

“Our European festivals in particular have grown strongly in the second quarter, with revenue per fan at these festivals up 12%,” Rapino stated. “Overall, through July we are pacing double-digits ahead of last year in committed net revenue, with over 90% of our planned net revenue for the year committed. Given this, we currently expect to deliver double-digit operating income and AOI growth in sponsorship again this year.”

Live Nation’s Ticketmaster unit saw an increase of 11 percent globally on the quarter in gross transaction value (GTV) on fee-bearing tickets. As a result, Ticketmaster’s operating income was up 12 percent and revenue up 13 percent according to Live Nation.

“Our digital ticketing roll-out is proceeding on plan, with the first phase in 2018 focused on deploying our Presence access control systems. To date, we have installed Presence systems in 125 venues, with another 75 venues planned in the second half of this year, positioning us to have at least 60 million fans using this system next year.”

As of Friday morning, Live Nation’s stock price was down more than 2.5% after the market’s opening although the major U.S. indexes were mostly flat.  The slight selloff despite strong earnings may be thanks to traders who gobbled up shares ahead of the earnings call as rumblings of a potential merger with SiriusXM ramped up.  LYV stock has outpaced the greater market indexes by a wide margin, with the share price up nearly  37% over the last 12 months and just under 20% year to date as opposed to the S&P 500’s YTD 5.24% gain and 15% on the last 12 months. 

The company appears to have brushed off a scathing New York Times expose from April that said the U.S. Department of Justice was looking into its business practices following complaints from rival promoter AEG.  The stock price briefly tanked to around $36 following the Times report, but had largely regained that by the end of May and by July had hit new all-time highs at the $50 mark.

“We have built the industry’s most scalable and unparalleled live platform, bringing over 550 million fans in 40 countries to live events each year,” Rapino stated.