EMUSIC EARNINGS: LOSSES AND REVENUES UP
The leading seller of digital downloads showed revenues of $4.7 million, up 65% from the same period last year. Its music revenues increased 628% to $1.7 million. Advertising revenues were even from the previous quarter, at $3 million.
The company announced a pro forma net loss of $8.7 million, or $0.21 per share, and said it will record $1 million in restructuring costs in the quarter ending March 31. That's compared with a pro forma net loss of $8.4 million or $0.28 per share during the second quarter a year ago
Visits to EMusic's sites, including DownBeat.com, IUMA.com and EMusic.com have increased more than 25% from the first quarter. Its RollingStone.com site saw more that one-third more hits. The period also saw eMusic's licensed digital music catalog grow to more than 150,000 songs.
Earlier this year, EMusic switched from a pay-per-download to a subscription model. Last month, EMusic underwent a massive corporate restructuring in an attempt to save the company $16 million in annual operating costs (hitsdailydouble.com 1/12). The company reduced its workforce 36% and consolidated its operations to focus on RollingStone.com and eMusic.com downloading service. The $1 million spent in severance will be reflected in EMusic's third quarter earnings.
"Despite the well-publicized challenges of the online music and Internet advertising markets, we continue to believe we are well-positioned for long-term success in both categories," said President/CEO Gene Hoffman. "Either that or we're blowing the last of our cash on that cool ‘IT' gizmo that everybody's talking about."
All is not as rosy on the stock front, however. The company is threatened with Nasdaq delisting, and before the earnings were announced, its stock closed down $.03 at $.47 per share.
