Is Guy Hands crazy...or crazy like a fox?

Warner Music announced earnings yesterday...and they sucked. The good news was, revenue was up considerably. CD sales were up 18% to $950M. Music publishing was up slightly. And digital sales were up 41%. Despite all this good news, the company recorded a $16M loss versus an $18M profit last year. Okay so where's the problem? In a word, expenses. They took an $18M goodwill charge but also had much higher SG&A.

Guy Hands has been on a controversial tear at EMI of slashing costs. Some think its genius. Others think he's killing the company. Some think its the right idea but he's going too far.

But when you look at results like this, you can't help but think that there's nothing wrong with Warner's revenues, they just can't run their damn business right. Why in the name of God would you increase SG&A in this climate? Warner's management should be fired and they should put someone in there with a brain.