Napster Shares Jump After Boosted Guidance
Tuesday April 5, 4:35 pm ET
Napster Shares Jump After After the Online Music Distributor Raises Fourth-Quarter Revenue Guidance
NEW YORK (AP) -- Shares of Napster Inc. soared Tuesday after the online music distributor raised its fourth-quarter revenue guidance, citing strong subscriber growth and better-than-expected sales of downloads.
Napster said Tuesday it now expects revenue of between $16.5 million and $17.5 million for its recently ended fiscal fourth quarter. Analysts surveyed by Thomson Financial are looking for the company to post a fourth-quarter loss of 63 cents per share on sales of about $14.5 million.
This marks the second time in about five weeks that Napster has raised its forecast for fourth-quarter revenue.
The Los Angeles-based company said its subscriber base grew by 143,000 in the fourth quarter to total more than 410,000, including 56,000 university subscribers. This represents quarterly subscriber growth of more than 53 percent from the third quarter.
Napster has emerged as a chief rival to Apple Computer Inc.'s market-dominating iTunes music store, which charges 99 cents per download. The company has sold more 300 million songs through iTunes.
Napster, on the other hand, offers a subscription service that allows unlimited access to its 1 million tracks. The subscriptions cost about $10 a month. Napster To Go, released in early February, allows those songs to be transferred to a portable player for $5 more per month. Users also have the option to purchase songs for 99 cents each.
Napster shares rose 57 cents, or 9.2 percent, to close at $6.74 in Tuesday trading on the Nasdaq Stock Market. The stock has slowly declined since hitting a 52-week high of $10.40 on Dec. 7, although shares are still well above their 52-week low of $3.35, reached last August. |
