Pandora Loss Widens; Stock Down On Soft Earnings Outlook

(RTTNews) - Internet radio service Pandora Media Inc. (P), Thursday reported a wider loss for the second quarter, hurt by content acquisition and marketing costs, even as revenue surged on growth in mobile advertisements. Excluding items, Pandora posted a profit that topped Wall Street estimates.

Pandora provided soft earnings guidance for the third quarter as well as for the full year 2014, citing mainly investments on new technologies and channels. However, the company raised its revenue expectations for the year.

Shares of the company dropped 4.5 percent in after-hours trade on the New York Stock Exchange.

Pandora, based in Oakland, California, posted quarterly net loss of $7.8 million or $0.04 per share, compared to last year's loss of $5.4 million or $0.03 per share.

Excluding items, adjusted earnings for the quarter were $7.5 million or $0.04 per share. On average, 25 analysts polled by Thomson Reuters expected earnings of $0.02 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter jumped 55 percent to $157.4 million from $101.3 million last year, and topped analysts' expectations of $156.35 million.

Advertising revenue rose 44 percent to $128.5 million, and subscription revenue more than doubled to $29 million.

Pandora's results comes amid rising popularity for its services, even as it faces rivalry from Spotify.

The company said its active users reached 71.2 million for the quarter, up 30 percent year-over-year. Listener hours climbed 18 percent.

However, results were impacted by expenses that escalated to $165 million from $106.6 million a year ago.

For the third quarter, Pandora expects adjusted earnings of $0.03 to $0.06 per share and adjusted revenue of $174 million to $179 million. Analysts currently expect earnings of $0.08 per share on revenue of $170.46 million.

For fiscal year 2014, the company now expect adjusted earnings between breakeven and $0.05 per share and adjusted revenue of $640 million to $655 million. Analysts currently expect earnings of $0.05 per share on revenue of $633.85 million for the year.

Earlier for 2014, Pandora estimated adjusted results to range between a loss of $0.02 per share and a profit of $0.08 per share with revenues of $615 million to $635 million.

Shares of Pandora closed Thursday at $21.71, up $0.22 or 1.02%, on a volume of 14.6 million shares. In after hours, the stock slid $0.99 or 4.56%. In the past year, the stock trended in the range of $7.08 - $21.98.