Napster Says Results Should Beat Prior Forecast

Online music service Napster said Tuesday its quarterly results should exceed its prior outlook, helped by the integration of more than 225,000 AOL Music Now paid subscribers into its service.

The Los Angeles-based company said that for the fourth quarter, it will likely report more than $28 million in sales and more than 830,000 paid subscribers. In February, Napster said it expected fourth-quarter sales above $26 million. The news prompted the stock to jump on Tuesday.

Napster also reported internal growth of 40,000 net paid subscribers during the quarter.

In January Napster reached a deal to become the exclusive online music subscription service to AOL, the Internet division of Time Warner , and it said the deal would result in record subscriber levels by the end of fiscal 2007.

The company said it believes it is now the largest on-demand music subscription service, overtaking RealNetworks's Rhapsody subscription service.

Napster will report fourth-quarter results on May 16.