WARNER Music Group Corp beat Wall Street expectations with its fourth-quarter results on Tuesday and announced that digital revenues at its Atlantic Records unit had surpassed compact disc sales for the first time, a major industry milestone.

Digital revenue at the Atlantic label, whose artists include rapper TI and Kid Rock, grew to 51 percent of the total for the year to September, thanks to "a progressive and well-executed digital strategy," said Warner spokesman Will Tanous.

The feat was a first for any major record label and offered a ray of hope for the music industry, buffeted by online piracy and falling CD sales.

Warner Music's overall digital sales grew 28 percent to US$167 million in the quarter that ended September 30, from US$131 million in the same period last year.

That's about 20 percent of the group's total revenue, which slipped 1 percent to US$854 million from US$867 million.