Updated from 5:39 p.m. EST
swung to a fourth-quarter loss as operating costs grew, but the bottom-line results were better than analysts' expectations.
The audio entertainment company said Thursday that revenue rose 76% to $18 million, just under the $18.3 million predicted by consensus estimates from Thomson First Call.
Audible lost $2.1 million, or 9 cents a share, in the fourth quarter, better than the 11 cents a share loss expected by analysts polled by First Call. But it wasn't music to the ears when compared with the same quarter last year, when the company had net income of $1.25 million, or 5 cents a share.
"Q4 was a tough one. The rough transition to a new site took a toll on the numbers," CEO Donald Katz said in a subsequent conference call with analysts.
In addition to the new Web site, customer acquisition costs were higher for the quarter. The company spent heavily in online media, said CFO Andrew Kaplan, but problems with the new Web site prevented the company from converting site visitors to new Audible listeners.
The new site required an investment in customer service, but Katz said the company reached a milestone in January 2006, with zero backlog in customer service calls and emails.
The company said that it would not provide specific guidance for the first quarter because the company needs to figure out how shifting customer behavior, the new site and new AudibleListener plans, will affect the revenue stream.
In general, executives said they expected to see a loss for the current quarter, though less of a loss than last quarter, and then improvement over the full year. Consensus estimates predict the company will lose 2 cents a share on sales of $21 million.
Other factors in the digital delivery system -- including the number of devices and their ease of use, customer awareness, and how quickly digital delivery is adopted as habit -- continues to be clunkier than it will be over time, executives said.
In recent after-hours trading, shares of Audible were off 1.3% to $9.82.
Operating expenses in the quarter more than doubled to $21.6 million from $9.9 million a year earlier.
For the full year, Audible said total customers acquired reached 303,000, representing growth of 67% vs. the prior year.
The company also announced that its board of directors has approved a program to repurchase $25 million in common stock. In addition, CFO Kaplan will move from that post to one that focuses on the company's international businesses. The company is now on a search for a new CFO.