Pandora Q3 Loss Narrows - Update

(RTTNews) - Internet radio service provider Pandora Media Inc. (P), Thursday said its loss for the third quarter narrowed from a year ago, due largely to a surge in ad revenues. However, shares of the company fell six percent in extended trading, following the news.

Oakland, California-based Pandora's third-quarter loss narrowed to $2.0 million or $0.01 per share from $4.1 million or $0.02 per share last year.

Excluding items, adjusted net income for the quarter improved to $20.3 million or $0.09 per share from $10.2 million or $0.05 per share last year. On average, 31 analysts polled by Thomson Reuters expected earnings of $0.08 per share for the third quarter. Analysts' estimates typically exclude special items.

Pandora's revenues for the third quarter surged to $239.6 million from $169.3 million a year ago. Analysts had a consensus revenue estimate of $238.5 million for the quarter.

Advertising revenues, which forms a major part of revenues, soared 44 percent to $194.3 million, while subscription revenues jumped 25 percent to $45.3 million.

Third-quarter total listener hours rose 25 percent to 4.99 billion, while share of total U.S. radio listening for Pandora in September increased to 9.06 percent from 7.77 percent last year. Total active listeners grew 5.2 percent to 76.5 million.

Total operating costs jumped to $114.8 million from $77.5 million last year.

While Pandora has been able to grow its top line as more and more listeners tune in to its radio service, the company has struggled to post profits as royalty payments and other overheads has weighed down its bottom line. Pandora is also striving to compete with Spotify, Google, Apple, and Google, among others.

Looking forward to the fourth quarter, the company expects adjusted earnings of $0.17 to $0.19 per share and revenues of $273 million to $278 million. Analysts currently expect earnings of $0.17 per share on revenues of $272.75 million for the quarter.

For the full year 2014, the company now expect adjusted earnings of $0.19 to $0.21 per share on adjusted revenue $912 million to $917 million. Analysts currently expect earnings of $0.18 per share on revenue of $911.58 million for the full year 2014.

Earlier, the company projected adjusted earnings of $0.16 to $0.19 per share on adjusted revenues of $895 million to $915 million.

P closed Thursday's trading at $23.12, up $0.41 or 1.81%, on the NYSE. The stock, however, slipped $1.45 or 6.27%, in the after-hours trade.