Warner Music slips as suspended dividend overshadows revenue

Earlier in the day Warner Music, whose artists include R.E.M. and Madonna, said it was suspending its dividend to shareholders to lower debt amid the uncertain economy, unstable credit markets and ongoing softness in the recorded music market.

Analyst Ingrid Chung said in a client note that Warner Music faces the challenge of trying to "invest further to gain scale as a 360 music company vs. its balance sheet constraints, although the dividend suspension does somewhat increase the company's flexibility."

Chung said her estimates and price target are under review.

Shares of Warner Music Group shed $1.48, or 16 percent, to $7.57 in morning trading. In the past year, the stock has traded between $4.57 and $18.22.