Roxio has reported a net loss of $11.9 million for its fiscal second-quarter results.
The results exceeded the expectations of analysts polled by Thomson First Call.
The second-quarter losses compare with a net loss of $1.8 million in second-quarter 2002. Second-quarter revenues fell to $22.8 million from $27.9 million a year ago.
Roxio's digital-media software division recorded revenues of $21.3 million and a pretax loss of $2.5 million.
Roxio chief financial officer Elliot Carpenter said: "We remain focused on the annual release cycle of the digital media suite, which we expect to drive retail growth in our fourth fiscal quarter."
Roxio said it expects its software division to record a third-quarter loss of 47 cents per share, including 13 cents in restructuring charges, and then to return to profitability in the fourth quarter, excluding restructuring charges.
As it focuses on the relaunch of Napster, anticipation for which has already boosted Roxio's stock up 105 per cent this year, second-quarter revenues for the company's online-music division totalled about $1.5 million, with pre-tax loss was $9 million.
Roxio chairman and CEO Chris Gorog said: "Our beta launch of Napster 2.0 drew significant interest and set the stage for the eagerly awaited consumer launch of the service on October 29th."
The company has announced that Microsoft will include Napster software on its Media Centre, and that Gateway will ship Napster on every consumer desktop PC it sells.
Carpenter added: "While we are not providing pre-launch revenue or loss-per-share guidance for the online-music division, we plan to provide a mid-quarter update and then detailed financial guidance for our online music business when we report results for the December quarter."