, an Internet company riding the coattails of
iPod success, swung to a third-quarter profit Tuesday but disappointed investors who had high expectations for a bullish read on the future.
In an announcement before Tuesday's close, the company raised its guidance for the full year, but the outlook implied fourth-quarter revenue merely in line with current estimates.
Shares of Audible shed $1.09, or 5.4%, to $19.05 in recent trading.
Under generally accepted accounting principles, Wayne, N.J.-based Audible reported net income of $483,884, or 2 cents a share, in the third quarter. That reversed a loss of $2.8 million, or 27 cents a share, in the same period a year earlier.
Revenue rose 87% to $9.3 million from $5 million a year earlier and 15% from $8.1 million in the previous quarter.
Wall Street analysts expected Audible to earn 2 cents a share on $8.67 million in revenue in the third quarter, according to Thomson First Call.
Audible raised its guidance for 2004 revenue a second time, to a range of $33 million to $34 million, up from a previous range of $29.5 million to $31.5 million. That represents annual revenue growth of 71% to 76% and just modestly exceeds the consensus estimate calling for revenue of $33 million for the full year.
However, based on that full-year range, Audible's forecast for fourth-quarter revenue would range from $8.9 million to $9.9 million. The lower end of that range falls short of analyst estimates calling for fourth-quarter revenue of $9.47 million.
The company also raised its guidance for 2004 free cash flow to $2.5 million to $3 million, from a previous range of $2 million to $2.4 million. And the company expects 2004 net income before dividend and preferred stock conversion charges to be at the higher end of the previously stated range of $1 million to $1.4 million.
Analysts were projecting 2004 earnings of 6 cents a share and fourth-quarter earnings of 3 cents a share.
Audible has an exclusive agreement to distribute audio content to Apple's wildly successful iTunes music store, whose content works only with Apple's proprietary iPod players. Apple surprised analysts with a whopping 2 million iPods shipped last quarter, which analysts read as a good indicator for Audible,
a play on iPod whose market basically expands as more of the players are sold.
Audible gained 40,566 new customers in the third quarter, compared with 35,250 new customers in the second quarter. Of those, 31,726, or a record 78%, were AudibleListener members. That compared to a gain of 24,500 AudibleListener members -- or 70% of total customers -- in the second quarter.