Napster Reports Wider Loss, Meets Views
Thursday, May 17, 2007; 12:41 AM
LOS ANGELES -- Napster Inc. closed out its fiscal fourth quarter with subscriber rolls at an all-time high and a new marketing approach meant to keep costs down for the online music retailer.
Still, the company said its loss widened during the quarter due to the impact of a one-time gain in the year-ago quarter.
Napster said Wednesday that its net loss was $8.5 million, or 20 cents per share, in the period that ended March 31, compared with $4.4 million, or 10 cents per share, in the year-ago period.
Excluding the after-tax impact of a $5.4 million gain from last year's sale of Roxio, its CD-burning software division, Napster narrowed its fourth-quarter loss to $1.3 million.
Revenue rose 9 percent to $29.1 million, compared with $26.8 million in the same quarter last year.
Wall Street's consensus estimates anticipated a loss of 20 cents a share and $27.9 million in revenue, according to Thomson Financial.
Napster's results were released after markets closed. Its shares fell 15 cents, or 3.7 percent, in extended trading after they rose 9 cents to $4.07 in regular trading Wednesday.
During a conference call with analysts, Napster Chairman and Chief Executive Chris Gorog boasted the company was in its strongest position since launching a little over three years ago.
"As we head into fiscal 2008, we are acquiring customers cheaper and keeping them longer. We are growing revenues while reducing expenses. We are attracting more world-class partners than we ever have before," Gorog said.
Napster said it closed the quarter with a worldwide paid subscriber base of 830,000, including subscribers at universities and some 225,000 former AOL Music Now users.
The number of paid Napster subscribers rose 37 percent from the year-ago quarter, the company said.
For the fiscal year, the company reported a net loss of $36.8 million, or 85 cents per share, compared with a loss of $54.9 million, or $1.28 per share, during the previous year.