Warner Music Plunges on Surprise Loss

NEW YORK (TheStreet) -- Warner Music(WMG Quote) can't seem to turn a profit.

Finally, Wall Street was expecting the company to report black figures for its latest quarter Thursday morning, but when the struggling record producer -- the last independent publicly traded music label anywhere -- came clean with an unexpected loss, investors punished Warner's rather illiquid stock.

The shares were trading recently at $6.27, down 79 cents, or 11%. But because just 340,000 shares change hands on average each day, the action Tuesday pushed Warner's stock price around wildly early in the session. The stock fell as low as $4.52 not long after the market opened.

Warner continues to boast a roster filled with some of the biggest pop names in the world, including hip-hop impresario Jay-Z and venerable icon Madonna, both of whom recently released financially successful albums.

But, as everyone knows, the rise of digital music and the continuing ubiquity of online piracy of said digital music, has brought the recording industry to its knees.

Excluding $14 million in severance costs to pay for a mass round of layoffs, Warner said it lost 3 cents a share in the fourth quarter. On average, analysts were expecting the company to earn 5 cents a share, according to Yahoo Finance.