Roxio Loss Narrows, but Revenue Drops 25%

Roxio Inc., maker of popular consumer software for recording CDs and DVDs, reported Thursday that fiscal first-quarter revenue fell 25% amid weaker sales and sharply lower licensing fees from manufacturers.

Nevertheless, the company reported a much narrower loss for the three months ended June 30 -- $370,000, or 2 cents a share, compared with $1.2 million, or 6 cents, a year earlier. The latest results include a $10.6-million gain from selling assets related to GoBack, a data recovery program, to Symantec Corp. of Cupertino, Calif.

Santa Clara, Calif.-based Roxio has two main lines of business: disc-recording software and the Pressplay online music service, which it bought from subsidiaries of Vivendi Universal and Sony Corp. in May. The company plans to expand the service by the end of the year and relaunch it as Napster 2.0, using the brand name but not the technology it acquired from the defunct file-sharing pioneer last year.

The company reported revenue of $24.2 million, down from $32.3 million a year earlier.

Chief Financial Officer Elliot Carpenter said $23.4 million of that came from the consumer software division, with $780,000 coming from the Pressplay service.

Pressplay accounted for about $4 million in losses in the quarter and is projected to cost $10.4 million before taxes in the quarter ending Sept. 30, Carpenter said.

Second-quarter revenue is expected to drop to $20 million in the software division while rising to $1.5 million from Pressplay. The company said it expected an overall loss of $15 million, or 56 cents a share.

Roxio’s shares closed at $7.76, down 1 cent, in Nasdaq trading before the earnings were announced.

The shares dropped an additional 58 cents, or 7.5%, in after-hours trading.