Motley Fool
0
All posts from Motley Fool
Motley Fool in Motley Fool,

Live Nation Entertainment, Inc. Sold 105 Million Tickets Last Quarter

Ticket vendor and live events arranger Live Nation Entertainment (NYSE: LYV) reported third-quarter results on Thursday. Top-line sales jumped 12% higher and net profits rose 23%, as the company increased both the number of managed events and average ticket prices. Here's a closer look at Live Nation's quarter.

Live Nation's third-quarter results: The raw numbers

Metric

Q3 2017

Q3 2016

Year-Over-Year Change

Revenue

$3.56 billion

$3.17 billion

12%

Net Income Attributable to LYV Shareholders

$136 million

$111 million

23%

GAAP Earnings per share (diluted)

$0.53

$0.49

8%

Data source: Live Nation.

What happened with Live Nation this quarter?

  • Ticketmaster sold 50.2 million fee-bearing tickets and 65.3 million fee-free stubs in the second quarter, up from 45.9 million and 68.1 million, respectively, in the year-ago period.
  • The number of North American concerts covered by the company's services rose by 7%, from 4,950 to 5,275.
  • The international segment managed 1,483 concerts, a 23% year-over-year increase from 1,207 events in the third quarter of 2016.

Based on these results, management reiterated that the Ticketmaster segment should deliver growth in the high single-digit range for the full year, both in terms of revenues and in the adjusted operating income. Sponsorship sales and operating profit growth is tracking in the low teens. The concerts division is headed toward "record results," featuring 20% higher ticket sales.

Image source: Getty Images.

What management had to say

On a conference call with analysts, Live Nation's executive team provided valuable backstage insights about the fuel for the company's growth fires.

Music festivals have become an important growth driver. As the company connects brands with consumers through festival sponsorship, revenues in that business are up 20% year over year. In general, Live Nation has attracted more than 50 million-dollar branding campaigns and this group of big spenders now accounts for 80% of the company's advertising revenues.

The international success story was also built around a handful of superstar clients, said COO Joe Berchtold according to a transcript courtesy of Seeking Alpha:

Our international markets have been particularly strong this year, adding 5.5 million fans while the U.S. has grown by 3.5 million. Arenas and stadiums have driven much of this growth globally, adding 7 million fans while festivals and theaters and clubs also contributed to these increases.

Underlying its growth is an expanding group of artists touring with us, many of whom are now touring across multiple markets or globally, including six artists who have each performed in front of over 1 million fans so far this year: U2, Coldplay, Guns N' Roses, Depeche Mode, Bruno Mars and Metallica, all of whom we worked with globally.

Looking ahead

Live Nation's management thinks of the concert business as a flywheel, borrowed from the dictionary of Good to Great author Jim Collins. It's not easy to accelerate that hefty operation, but the momentum that builds when you do achieve significant growth becomes a self-reinforcing growth engine. Live Nation can then build additional business opportunities on and around that vibrant core, paving the way toward years of sustainable growth.

That's the theory. Right now, Live Nation is plugging in new ideas to the concert-based flywheel, such as all-digital ticketing systems designed to give partners and ad buyers a more complete picture of each individual ticket buyer. Fortunes have been made on similar business platforms, so Live Nation is borrowing ideas from some powerful role models. Now let's see how targeted advertising works out in the ticket-buying sector.

10 stocks we like better than Live Nation Entertainment
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Live Nation Entertainment wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of October 9, 2017

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool recommends Live Nation Entertainment. The Motley Fool has a disclosure policy.