Live Nation shares jump 27 pct as results beat view

NEW YORK (Reuters) - Shares of Live Nation Inc jumped 27 percent on Friday, a day after the concert promoter posted second-quarter results that beat expectations.

Live Nation reported a lower profit year-on-year but Wall Street had been expecting it to swing to a loss.

Analysts had expected the company to be hit by a drop-off in concert ticket sales as the U.S. economy slows down but the company posted increases in both ticket sales and live events.

Live Nation Chief Executive Michael Rapino told analysts the company has not been affected by the economic slowdown. "History has shown that even in a recession, consumers go to shows," said Rapino.

Wall Street had also been concerned that the company's bottom line would be negatively impacted by its spending on multimillion-dollar comprehensive contracts with big name artists like Madonna, Jay-Z and Nickelback.

Last October Madonna said she would leave Warner Music Group to join Live Nation for a deal reported to be worth $120 million.

The company has explained that payments for such deals are spread over the term of the contract -- usually 10 years.

"Their shares were being pummeled for several months in part on rumors and misperceptions about how the cash flows work for these big deals," said David Joyce, analyst at Miller Tabak.

"The artists only get paid as they perform and the margins are much better," said Joyce.

Shares of Live Nation rose $3.34 to $15.96 in morning trade on the New York Stock Exchange. But shares of Warner Music, which posted a narrower quarterly loss on Thursday, fell 54 cents to $7.73.

(Reporting by Yinka Adegoke, editing by Dave Zimmerman)