Napster loss narrows; f'cast bad
Napster reported a net loss of $4.4 million, or 10 cents per share, for the fourth fiscal quarter ended March 31.india Updated: May 18, 2006 11:18 IST
Online music service Napster Inc posted a narrower quarterly loss on Wednesday aided by strong subscription growth, but its shares fell over 7 per cent after a disappointing revenue forecast.
Napster reported a net loss of $4.4 million, or 10 cents per share, for the fourth fiscal quarter ended March 31, compared with a year-ago net loss of $24.3 million, or 60 cents per share.
Revenue rose to $26.8 million from $17.4 million. The net loss from continuing operations was $7.3 million, or 17 cents per share.
The fourth quarter results beat Wall Street estimates. Analysts, on average, had forecast a loss of 35 cents a share on revenues of $25.3 million, according to Reuters Estimates.
Nevertheless, Napster shares fell 7.2 per cent, or 28 cents, to $3.65 in after-hours trade, amid disappointment with the company's first quarter revenue projection. The stock had closed up 26 cents at $3.93 in regular trading on Nasdaq.
Napster said it estimated first-quarter revenue of about $25 million to $28 million.
Before the better-than-expected fourth quarter, analysts, on average, had been forecasting first-quarter revenues of about $26.7 million, according to Reuters Estimates.
But with the uptick in fourth quarter revenues, analysts would have hoped for a bigger first quarter projection.
"The guidance was disappointing. The March quarter looked better, but June (quarter) looks worse," said American Technology Research analyst PJ McNealy.
At the end of March 31, Napster's total paid subscriber base was 606,000, including 59,000 university subscribers.
Excluding university customers, the number of premium paid subscribers grew 16 per cent from the third quarter of fiscal 2006 and 54 per cent year-over-year.
Subscriber revenue, from monthly subscription fees as well as downloads by both paid and trial subscribers, accounted for about 87 per cent of music revenue, compared to 86 per cent in the preceding quarter.