Liquid Audio's 4Q loss smaller than expected

Liquid Audio (Nasdaq: LQID) posted a smaller-than-expected loss in its fourth quarter Thursday, dropping $7 million, or 36 cents a share, on sales of $1.3 million.

First Call consensus expected the maker of Internet music software to lose 44 cents a share in the quarter.

Its shares closed off 1 1/2 to 30 3/4 ahead of the earnings report.

The $1.3 million in sales excludes a $1 million cash payment received pursuant to the Liquid Audio Japan agreement, which was recorded as deferred revenue on the balance sheet at December 31.

In the year-ago quarter, it lost $2.2 million, or 12 cents a share, on sales of $1.1 million.

Analysts were looking for sales of roughly $2 million in the quarter.

"Continued strong fundamentals and the growth of our global music distribution network characterized the fourth quarter of 1999," said CEO Gerry Kearby in a prepared release. "In addition to penetrating international markets, we made further inroads with the major record labels and expanded our retail distribution channel."

In the quarter, Liquid Audio's distribution network was used by more than 6,000 artists and 1,000 record labels to promote and sell online, up 36 percent from the end of the third quarter.

Its content was syndicated to more than 450 music and retail Web sites for preview and sale over the Internet.

For the year, Liquid Audio lost $19.7 million, or $2.28 a share, on sales of $4.4 million compared to a loss of $7.3 million, or 80 cents a share, on sales of $2.8 million in fiscal 1998.

Its shares moved up to a 52-week high of 49 1/4 in November after falling to a low of 17 7/8 in August.>