Napster Narrows Loss, Doubles Subscriber

By | February 9, 2005 at 12:00 AM

Los Angeles – Online music seller Napster Inc. reported a narrowed loss for its latest quarter, excluding a gain from the sale of its Roxio consumer software division.

The Santa Clara, Calif., company also said current quarter’s revenue will top the average Wall Street prediction.

For the third quarter ended Dec. 31, Napster earned $12.8 million, or 36 cents a share, a reversal from a last year’s loss of $25.6 million, or 92 cents a share, in the same period.

The latest results included a gain from the sale of the Roxio division, which made CD-burning software, to Sonic Solutions in December. Excluding the gain, Napster posted a third-quarter loss of $16.4 million, or 47 cents a share.

Analysts surveyed by Thomson First Call were expecting a loss of 44 cents a share.

Last year’s loss from continuing operations was $17.9 million, or 64 cents a share, in the same period.

Revenue for the quarter more than tripled to $12.1 million from $3.6 million a year ago but fell short of a First Call projection of $15.3 million.

At the end of the third quarter, Napster said it had 270,000 paying subscribers, including about 44,000 from universities. The number was up 50 percent from the second quarter, Napster said.

For the fourth quarter, Napster expects revenue of about $14 million, which tops a First Call projection of $12.8 million.

Though Napster shares climbed in after-hours trading, it wasn’t enough to overcome a 9.1 percent decline before Wednesday’s close. At 6 p.m. EST, Napster shares were at $8.25, up 39 cents, or 5 percent, from the close.

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