EMI Warns on Earnings as Albums by Coldplay, Gorillaz Are Delayed

EMI Group, one of the world’s largest music companies, warned Monday that its full-year sales and profit would be below expectations because of the delayed release of two key albums and market weakness in the fourth quarter. Its shares plummeted.

EMI, which owns several record labels including Virgin and Capitol, said the latest offerings from the bands Coldplay and Gorillaz -- both expected to be big sellers -- would be released in the first half of the next financial year. The albums had been due to hit the shelves before the end of the current fiscal year in March.

The London-based company added that reorders -- the demand from shops for its previously released titles -- was lower than expected in January, leaving forecasts for annual sales from its music division between 8% and 9% lower than a year earlier. It said it expected the trend for sales, particularly in reorders, to remain weak during February and March.

“We generated good initial sales from our second-half major releases, but given recent reorder levels and the revised timing of these two major albums, we will now not maintain market share for the full financial year,” Chairman Alain Levy said.

EMI said annual pretax profit would be about 138 million pounds ($258.4 million), substantially lower than analyst expectations of around 163 million pounds ($305.3 million) and down from the previous year’s pretax profit of 163.4 million pounds.

Shares in EMI slumped $2 to $8.70 on the New York Stock Exchange.