NEW YORK (AP) - Shares of Audible Inc. surged 20 percent in Tuesday trading after the company reversed a year-ago loss to post a first-quarter profit that topped Wall Street expectations.

Audible shares jumped $2.64 to $16.92 in afternoon trading, with nearly five times the average number of shares changing hands on the Nasdaq. The stock hit a 52-week high of $30.65 in November and traded in the upper $20s until mid-February, when Audible warned that investments in new businesses would dampen results until at least 2006, sending shares down 35 percent.

Late Monday, Wayne, N.J.-based Audible said first-quarter earnings totaled $889,391, or 3 cents per share, compared with a loss of $10.4 million, or 56 cents, last year. Before paying preferred dividends, prior-year net income was $57,772.

Quarterly revenue totaled $12.9 million, nearly doubling revenue of $6.8 million a year earlier. Content sales grew 27 percent to $12.8 million, the company said.

Gene Munster, a Piper Jaffray analyst, noted that Audible`s plan to boost spending on marketing and acquiring new customers is working to expand its business, which he said he expects will continue growing in the next several quarters as more people use portable media players.

Last quarter, Audible added 72,000 new customers - including 55,000 subscriptions - during the period, which easily surpassed Munster`s forecast for growth of 52,000 customers and 40,000 subscribers.

The analyst added that the average cost per subscriber fell to $48 - below his target of $72 and down from $51 in the quarter ended in September.

``The bottom line: Audible`s strategy is working,`` Munster wrote in a research note. ``The company is adding subscribers at a faster pace than we had anticipated, at a cost lower than we had been expecting.``

Looking forward, Audible now expects yearly revenue of $62 million to $65 million, up from earlier views of $59 million to $62 million. Income before taxes is expected to range from $3.6 million to $4 million.

Analysts currently see a full-year profit of 7 cents per share on sales of $59.4 million. In 2004, Audible earned 9 cents per share and posted revenue of $34 million.