Live Nation Earnings: Business Looks Strong While Department of Justice Investigation Looms

Live Nation’s first-quarter results were excellent, with sales up more than 20% year over year and adjusted operating income up 15%. Concerts and sponsorship were the strongest segments, and the firm’s bookings and commitments bode very well for the full year. Perhaps as important as the results, however, is the potential US Department of Justice lawsuit that would allege antitrust violations. Management addressed the DOJ investigation at the outset of its earnings call and said that it is set to begin discussions with senior DOJ leadership. This regulatory risk is a factor in our High Morningstar Uncertainty Rating for Live Nation, but we are not accounting for an outcome in our fair value estimate, which remains $105.