Warner Music Group (WMG) announced its second quarter financial results for the period ended March 31, and like most record companies, WMG is seeing a decline in CD sales while digital music revenue is increasing. The company posted total revenue of $784 million for the second quarter of fiscal 2007, which is down 2 percent from the prior-year quarter. Digital revenue increased to $111 million, accounting for 14 percent of total revenue in the quarter. That number is up 23 percent from $90 million in the prior-year quarter and up 11 percent sequentially from the first quarter of fiscal 2007.

WMG also said that it will continue restructuring, cutting about 400 jobs and focusing more on its digital distribution system, according to Reuters. The company said that by the end of its fiscal year it would incur restructuring charges of $65 million to $80 million.

"We are in the midst of transforming Warner Music Group to a music-based content company," said Chairman and CEO Edgar Bronfman, Jr. "Despite tough comparisons to last year and a challenging industry environment, we achieved some important successes this quarter. We gained album share in the largest global music market, the U.S., achieved double-digit revenue growth in the second largest global music market, Japan, sustained our digital leadership position, and concluded new partnerships. Perhaps most significantly, we advanced our initiatives to maximize the value of our content and to diversify our revenue streams. Essential to the on-going success of those business initiatives, we are in the process of realigning the organization to more effectively deploy our resources to growth areas, such as digital and video distribution. By helping us manage physical costs, while redeploying our resources and ongoing investments towards new business initiatives, this realignment will ensure a successful transformation in an evolving music industry, not just for this year or the next, but for years to come."

Though WMG experienced help in the quarter from major sellers like Pretty Ricky, Red Hot Chili Peppers, Gerald Levert and Musiq Soulchild, revenue for the company's recorded music business decreased 4 percent from the prior-year quarter to $648 million. Softer sales in the U.K., France, Canada and Latin America were the most significant contributors to the decline. Recorded music digital revenue of $105 million grew 22 percent over the prior-year quarter and represented 16 percent of total recorded music revenue, WMG said. The company's music publishing revenue increased by 11 percent from the prior-year quarter to $143 million, an increase of 4 percent on a constant-currency basis.