Warner Music Group Corp., the world’s third-largest music company, posted a first-quarter loss Wednesday, hurt by higher expenses and an impairment charge.

The record company of Led Zeppelin, which was sold by Time Warner Inc. in 2003, posted a net loss for the quarter ended December 31 or $16 million, or 11 cents a share, compared with net income of $18 million, or 12 cents a share, a year earlier.

“2007 was a challenging year for the recorded music industry. We recognize that there remains much to be accomplished and are working towards translating these gains into enhanced value for shareholders,” said Chairman and Chief Executive Edgar Bronfman Jr. quoted by the Wall Street Journal.

The results included an $18 million impairment charge related to promoter Bulldog Entertainment, which Warner Music purchased in May 2007.

Although Warner Music had one of the best-sold albums in 2007 with Josh Groban’s Christmas album “Noel,” which sold 3.7 million copies in the U.S., according to Nielsen Soundscan, the company still struggled with the wider industry slowdown in recorded music sales. Overall, U.S. album sales dropped off 15 percent through 2007, according to data from Nielsen SoundScan.

Revenue grew 7 percent to $989 million from $928 million a year earlier. Analysts polled by Thomson Financial expected sales of $948.9 million.

Consumers increasingly switch to new forms of digital music. Digital sales grew 41 percent, to $141 million, making Apple Inc.’s iTunes Music Store the third-largest U.S. music retailer. This accounted for 14 percent of total revenue, compared with 11 percent a year ago. Music publishing revenue rose 8.3 percent, to $144 million from $133 million.