Poor Industry Outlook Hurts EMI Shares

EMI Group shares slid Monday after the world’s third-largest music company forecast zero growth in its troubled industry this year, even though sales in the United States were on the upswing and losses to online piracy had slowed.

The British company, home to such artists as Norah Jones and Radiohead, said it expected the global music market to be flat to down 4% by revenue in the current fiscal year.

The company posted a net loss of $130.7 million, swinging from a profit of $368.8 million the year before because of restructuring charges and a large one-time gain in the prior year from the sale of retailer HMV.

Its pretax profit for the year to March 31, before exceptional items and goodwill amortization, fell to $293 million. Analysts had expected profit of $292 million on average, according to Reuters Research.

EMI shares closed down $1.15 to $7.90 in over-the-counter trading in the U.S., and down 12.2% on the London Stock Exchange.

In the United States, where the music industry has aggressively cracked down on illicit online file trading and more consumers use legal downloading services like Apple Computer Inc.’s iTunes Music Store, EMI posted higher sales thanks to albums such as Jones’ second release, “Feels Like Home.”

But continental Europe continued to struggle, with sales down 13%. Revenue in Germany, France, Denmark, Sweden and Portugal was hit hard, EMI said, though there were signs that declines were slowing.