8:17:56 AM11/14/2007

DisneyShopping

Bertelsmann 9-month net profit lower on Napster settlements, other expenses

BERLIN  (AP) - Media group Bertelsmann AG said Wednesday that its net profit declined sharply in the first nine months of this year, pushed down by settlements of copyright claims that arose from its backing of file-sharing service Napster and other one-time expenses.

The privately held company said its net profit for the year's first nine months dropped to €10 million (US$14.6 million) from €265 million in 2006.

The decline "primarily reflects the previously reported special items resulting from settlements in connection with Napster," the company said in a statement. Bertelsmann already reported a €51 million net loss for the first half of this year.

Bertelsmann said in April that it would pay US$110 million (€75.4 million) to settle claims brought by Warner Music Group over the German company's financing of music-sharing download service Napster. Bertelsmann agreed to settle similar claims with EMI Group PLC earlier this year and paid US$60 million (€41 million) to Universal Music Group in 2006.

It said Wednesday that in addition, "a one-time expense of €96 million (US$140 million) arose in the third quarter for the settlement of antitrust proceedings against the advertising time marketer IP Deutschland."

The company said nine-month revenues — adjusted for portfolio and exchange-rate effects — were up 1.2 percent to €13.3 billion (US$19.4 billion). Its operating EBIT over the first three quarters rose by 4.7 percent to nearly €1.03 billion (US$1.5 billion).

"Bertelsmann further improved its operating profitability in the first nine months," Chief Financial Officer Thomas Rabe said in a statement. "For the full year, we also expect to exceed the results of fiscal 2006 in terms of revenues and operating results adjusted for portfolio and exchange rate effects."

Bertelsmann did not break out net profit figures for the third quarter, but said revenue in the period, adjusted for portfolio and exchange rate effects, came in at €4.3 billion (US$6.3 billion), the same level as the previous year. It said operating earnings before interest and taxes rose by 11.7 percent to €314 million (US$457.8 million).

Guetersloh-based Bertelsmann's businesses include book publisher Random House; a 50 percent holding in the Sony BMG Music Entertainment joint venture; and radio and television, including broadcaster RTL.

CarsDirect.com

more news

Home About us | Contact Us | CD Reviews | DVD Reviews | Film | News | TOS