Pandora reports profit, but stock is hammered

Dec 04, 2012
Traders on the floor of the New York Stock Exchange walk near an insignia for Pandora Media Inc., in 2011 in New York City. US Internet radio firm Pandora Media came under pressure after reporting a modest profit and strong revenue growth, but offering disappointing guidance for the coming quarter.

US Internet radio firm Pandora Media came under pressure Tuesday after reporting a modest profit and strong revenue growth, but offering disappointing guidance for the coming quarter.

Shares in the California-based Web radio leader slid as much as 20 percent in after-hours trade after it released its earnings for the third quarter.

Pandora reported a profit of $2.05 million. The earnings excluding special items amounted to five cents a share, better than most forecasts, and revenues beat expectations with 60 percent year-over-year growth to $120 million.

Advertising revenue was $106.3 million, a 61 percent year-over-year increase while subscription and other revenue rose 52 percent to $13.7 million.

"This quarter exceeded our expectations as we monetized mobile at record levels and grew total mobile revenue 112 percent," said Joe Kennedy, chairman and chief executive.

"During the quarter we launched Pandora 4.0, the biggest redesign on the iOS and Android platforms ever, bringing new, innovative and enhanced functionality to mobile devices for the first time for both users and advertisers."

But Pandora appeared to take a hit from its fourth quarter guidance, saying revenue is expected to be in the range of $120 million to $123 million and forecasting an operating loss of six to nine cents a share.

Pandora has been hurt by rumors in recent weeks that Apple is in talks to license music for a rival online radio service.

Some reports have said Apple was studying a launch of a streaming music service which could be pre-installed on its popular devices like the iPhone and iPad.

"The real problem for Pandora, though, is that its revenue stream is not growing fast enough, even without Apple as a competitor," said Paul Ausick at 24/7 Wall Street. "This is not a good day for Pandora."

Pandora went public last year at $16 a share, one of several Internet companies to make their debut on Wall Street in 2011.

The company is urging Congress to pass an overhaul of a law governing music royalties, claiming it pays a higher percentage of its revenues for song rights than its satellite radio rival.

Explore further: Record labels sue Pandora over older songs

add to favorites email to friend print save as pdf

Related Stories

CenturyLink 3Q net income falls as expenses rise

Nov 02, 2011

(AP) -- Phone company CenturyLink Inc. says its third-quarter net income fell as rising operating expenses related to its April acquisition of larger phone company Qwest overshadowed increased revenue.

Rackspace 1Q profit rises

May 03, 2010

(AP) -- Rackspace Hosting Inc. said Monday that its first-quarter profit rose as managed hosting revenue climbed.

Qualcomm 3Q results beat Wall Street estimates

Jul 20, 2011

(AP) -- Wireless chip-maker Qualcomm Inc.'s results for the latest quarter beat Wall Street's expectations, and its projections for the current quarter are also above analysts' estimates.

Recommended for you

US venture investments highest since 2001 (Update)

15 hours ago

Funding for U.S. startup companies soared 57 percent in the first quarter to a level not seen since 2001, as venture capitalists piled more money into a growing number of deals, according to a report due out Friday.

Weibo IPO below expectations, raises $285.6 mn

Apr 17, 2014

Sina Weibo sold fewer shares than expected in its US IPO which was priced below expectations ahead of a Thursday listing that takes place after tech selloffs on Wall Street.

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

Shinobiwan Kenobi
1 / 5 (2) Dec 05, 2012
Pandora reports profits but doesn't want to pay a fair royalty to the people that create what they stream... <== dick-move.

More news stories

LinkedIn membership hits 300 million

The career-focused social network LinkedIn announced Friday it has 300 million members, with more than half the total outside the United States.

Treating depression in Parkinson's patients

A group of scientists from the University of Kentucky College of Medicine and the Sanders-Brown Center on Aging has found interesting new information in a study on depression and neuropsychological function in Parkinson's ...