AOL Deal Lifts Napster Earnings

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Shares in Napster Inc. gained more than 2 percent Wednesday after the company reported fourth quarter earnings that beat Wall Street’s expectations.


Naspter Inc. reported a fourth quarter net loss that doubled to $8.5 million (-20 cents per share), compared to a loss of $4.4 million (-10 cents a share) from the same period a year earlier. That was in line with Wall Street’s expectations, according to a poll conducted by Thomson Financial.


However, the Los Angeles-based Internet music retailer reported an 8 percent hike in revenues to $29 million, beating analysts’ expectations of $27.9 million. For the year, Napster narrowed its loss to $37 million loss, (-85 cents), compared to a $55 million loss (-$1.28 per share) from 2006.

Revenues increased 17 percent to $111 million, due largely to a recent merge with America Online Inc.’s Music Now service.


“Napster concludes fiscal 2007 as the most popular on-demand music subscription service with healthy annual revenue growth and a significant decline in cash burn,” said Chris Gorog, Napster’s chairman and chief executive. Gorog added that the number of paid subscribers for the music service grew 47 percent from the previous quarter and 37 percent from the same period a year ago.


Shares in Napster closed up 9 cents, or 2.2 percent, Wednesday and gained another 2 cents in after-market trading to $4.09 in trading on the Nasdaq.

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