Higher revenue helps Napster narrow loss

Napster Inc. said its fiscal second-quarter loss narrowed from a year earlier, beating Wall Street estimates, as the online music service saw a boost in revenue.

The Santa Clara-based company, which said in September that it was exploring a possible sale, reported a net loss of $9 million, or 21 cents a share, for the fiscal quarter ended Sept. 30. That compared with a loss of $13.6 million, or 32 cents, a year earlier.

Revenue increased 9% to $25.5 million. Excluding a nonrecurring item, revenue for the quarter was $24.9 million, the company said.

Analysts surveyed by Thomson Financial expected a quarterly loss of 27 cents a share on sales of $25.5 million.

Napster said it closed the quarter with a paid customer base of 518,000, including 31,000 subscribers at universities.

Napster expects its third-quarter revenue to exceed $27 million. Wall Street had projected sales of $28.5 million during the period.

Napster shares were down 2 cents to $4.43 in aftermarket trading. Ahead of the report, the stock fell 9 cents, or 2%, to close at $4.45.