Warner Music Group Corp (WMG) widened its fiscal second-quarter loss and suspended its quarterly dividend as the company continues to struggle with the drop-off in CD sales amid the continued consumer shift toward digital music, widespread music piracy and peer-2-peeer file swapping.

The loss and dividend suspension helped send the company's stock down 23% to $7 in early trading. For the quarter ending March 31 WMG reported a net loss of $37million compared with a prior-year net loss of $27million although revenue rose 2% to $800million it would have fallen 4.4% without benefits from the weaker dollar.

Major sellers included titles from R.E.M., Simple Plan and Nickelback, as well as the soundtrack from the movie Juno.

Within the recorded-music segment, CD sales declined but digital revenue - which now makes up 24% of the segment's revenue and 21% of total revenue - jumped 48% although this was not enough to replace revenue lost though falling CD sales. Music-publishing revenue rose 8.4%.  

WMG last month formed a partnership with MySpace to offer the social-networking site's members a range of new music-listening and merchandising features.