Napster managed a net profit of $12.8 million in the quarter ended December 31, unfortunately for the company the profit came from the Roxio consumer software division – sold to Sonic Solutions in mid December.

In the same period last year the company made a net loss of $25.6 million.

The company posted a loss in continuing operations of $16.4 million, much lower than forecasts had suggested. Defending this, a Napster spokeswoman said some analysts had failed to account for the exclusion of the Roxio business, and had therefore set higher estimates that skewed the consensus figure, writes Marketwatch.

Revenue for the period was $12.1 million, compared with revenue of $3.6 million for the preceding quarter.

The company claimed that it had seen a 50 per cent growth in subscribers to its iTunes–competing music download service that quarter.

However, Napsters share price climbed 76 cents in after hours trading on Wednesday, closing at $7.86, after Napster set a fourth-quarter revenue target above analysts' expectations.