Pandora Turns To Q3 Loss On Higher Costs

(RTTNews) - Internet radio service provider Pandora Media Inc. (P), Thursday posted a loss in the third quarter, hurt largely by higher costs related to content, marketing and product development that offset a surge in revenues.

Pandora's revenues for the quarter soared 50 percent to $180.38 million from $120.01 million a year ago. Twenty analysts polled by Thomson Reuters had a consensus revenue estimate of $175.6 million for the quarter.

Advertising revenues, which forms a major part of revenues, rose 36 percent, with mobile advertising exceeding $100 million in revenues by growing 58 percent. Subscription revenues soared 156 percent to 37.2 million.

Third-quarter total listener hours rose 17 percent to 4.18 billion. Pandora, which is facing fresh competition from Apple's radio service that was launched in September, was able to improve its share of total U.S. radio listening in October to 8.06 percent from 6.61 percent last year. The company reported 70.9 million active users, a growth of 20 percent year-over-year.

Total costs and expenses for the quarter rose to $181.9 million from $117.8 million last year.

Oakland, California-based Pandora's third-quarter loss was $1.7 million or $0.01 per share, compared to a profit of $2.1 million or $0.01 per share last year.

Excluding special items, adjusted profit for the quarter improved to $12.3 million or $0.06 per share from $9.9 million or $0.05 per share a year ago. Analysts expected earnings of $0.06 per share for the quarter. Analysts' estimates typically exclude special items.

Looking forward to the fourth quarter, Pandora expects adjusted earnings of $0.02 to $0.04 per share and adjusted revenue of $185 million to $190 million. Analysts currently expect earnings of $0.04 per share on revenues of $187.26 million for the fourth quarter.

For the fiscal year 2014, the company has now forecast adjusted earnings of $0.03 to $0.05 per share and adjusted revenue of $657 million to $662 million. Analysts currently expect earnings of $0.03 per share on revenue of $645.50 million for the year.

Previously, Pandora expected adjusted earnings between breakeven and $0.05 per share and revenue of $640 million to $655 million.

P closed Thursday's trading at $29.68, up $1.24 or 4.36%, on the NYSE. The stock, however, slipped $0.46 or 1.55% in after-hours trade.