EMusic earnings beat the Street
Net-based record label and music seller EMusic reports second-quarter earnings, slightly beating analysts' expectations.
The Redwood City, Calif.-based company reported a pro forma loss of $8.2 million, or 27 cents per share, for the quarter. That compares with a net loss of $7.2 million, or 56 cents per share, for the first quarter. The pro forma loss excludes noncash charges relating to an acquisition of Cductive.
Analysts had expected EMusic to lose 30 cents per share for the quarter, according to First Call. The company, which reported its results after the market's close at 1 p.m. PST, was up 25 cents, or about 2.5 percent over the previous day, to $10.25.
EMusic, which offers more than 70,000 digital music tracks by predominantly independent artists, reported revenues of $423,000 this quarter, up from $180,000 in the previous quarter.
In the past six months, EMusic has struck deals with companies such as America Online to offer access to its songs. The site, which purchased the label Cductive late last month, also snatched up the music and information site Tunes.com--along with the company's rights to the RollingStone.com brand. That deal is expected to close in the third quarter.
Fueled by the availability of free music tracks in the MP3 audio format, companies stampeded the Net in 1999 to offer sites filled with songs from independent labels, directories that categorize all the free tracks on the Net, and Web sites featuring jukebox players that store and play songs. Digital music may give consumers more portability than CDs, allowing them to collect singles or albums to play via any computer, device or stereo.
As the popularity of digital music grew last year, so did EMusic's customer base. But EMusic still faces tough competition from brands such as Rioport.com and MP3.com and from major record labels that are starting to offer digital music.
EMusic's sales of downloadable music increased to $206,000 in the second fiscal quarter, a 390 percent increase compared to $42,000 sold in the preceding quarter.
"Consumers are willing to buy music online in a downloadable format," said EMusic's chief executive Gene Hoffman. "We'll continue acquiring great content, and we still expect significant increase in sales of downloadable music."