Napster Hews Loss, Dims View
Updated from 5:09 p.m. EDT
Online music-subscription company Napster (NAPS) narrowed its first-quarter loss and issued lighter guidance than analysts anticipated.
Napster on Wednesday said it lost $9.8 million, or 23 cents a share, in the first quarter of 2007, improving from a year ago when it lost $19.9 million, or 46 cents a share.
The result was better than the loss of 36 cents a share estimated by the Street.Napster's sales totaled $28.1 million, including a one-time gain of $1.9 million from prepaid card breakage, rising from $21 million in the first quarter 2006. The average estimate from Thomson First Call was $27.3 million. For the September quarter, the company expects about $25 million in revenue, falling short of the $29.5 million forecast by analysts. Napster forecast a loss of $12.5 million, or 30 cents a share, for the second quarter, a wider loss than the analysts' forecast of 26 cents a share. Shares of Napster recently slipped 2.2%, or 6 cents, to $2.69 on the news. Despite the disappointing forecast for the second quarter, the company said that the growing number of music-enabled cell phones will benefit Napster over the long term, and pointed to several new deals that should boost its fortunes. On a call with analysts, Napster said Suncom Wireless (TPC) will roll out Napster's mobile service next week. Customers will be able to purchase downloads on their cell phones, with simultaneous delivery to their PC. Napster also announced an "alliance" with Japan's largest wireless carrier, NTT DoCoMo (DCM). Its handsets will support the Windows Media Audio (WMA) format and will be compatible with Napster To Go. The lack of compatible, music-enabled cell phones was a barrier that "is now becoming unblocked," Napster CEO Chris Gorog said. "Our persistence and patience will be rewarded." Gorog also addressed the
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