Audible – which has an agreement to distribute spoken audio content through Apple's iTunes music store – has posted higher quarterly net income, but warned that higher spending on new initiatives would cut cash flow this year.
Following the news its stock fell almost 33 per cent, reaching $18.08 in after-hours trading – it had closed at $26.70.
The company reported fourth-quarter net income of $1.4 million, or 6 cents a share. This compares to just $24,000 in the same period a year earlier. Revenue jumped 77 per cent to $10.3 million.
Audible revealed its expansion plans for 2005, including the launch of operations in Britain, the start of a wireless service and the creation of an educational unit. The company also confirmed plans to make investments to acquire listeners and improve customer service.
Analysts polled by Thomson First Call were forecasting that Audible would bring in about 38 cents a share in earnings in 2005, excluding charges, up significantly from pro forma earnings of 9 cents a share in 2004, writes The Street.
But Audible said it expects income before income taxes in 2005 to range from $3.6 million to $4 million, excluding $2 million in expenses related to the launch of Audible in the UK in the second quarter and share-based expenses.