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Pandora (P) Plunges after Lowering Outlook

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Shares of Pandora Media, Inc. (NYSEđŸ˜›Pandora Media) are down over 20% in morning trade after the company lowered its first quarter and full year profit and revenue outlook. The company said that for its current quarter, which ends in April it expected to loose 18 to 21 cents per share while analysts expected the company to loose 2 cents per share.

Pandora (P) forecasted current quarterly revenue to come in between $72 million and $75 million. This is much lower than the $86.5 million forecasted by analysts. The company also expects a loss for its fiscal year ending in January 2013 versus the 3 cents a share profit forecasted by analysts. The annual revenue forecast of $410 million to $420 million also fell short of consensus estimates.

For the fourth quarter of fiscal 2012 Pandora (P) said total revenue was $81.3 million, a 71% year-over-year increase.  Advertising revenue was $72.1 million, a 74% year-over-year increase. Subscription and other revenue was $9.2 million, a 51% year-over-year increase. Adjusted net loss per share was ($0.03). The results were below analyst forecasts.


“The fourth quarter was a strong finish to fiscal 2012, which was highlighted by record revenue, radio market share, listening hours and active users,” stated Joe Kennedy, Chairman & CEO of Pandora (P).  ”Reflecting on our first fiscal year as a public company, we have many accomplishments to be proud of and much to look forward to in the year ahead.  Pandora continues to rapidly disrupt the radio industry and has only just begun to realize the potential of our $37 billion U.S. market opportunity.”

The company is adding more listeners. But it’s taking longer than expected to generate revenue from its increasingly popular mobile service, said Citi analyst Mark Mahaney. The longer-than-expected timeframe, coupled with Pandora’s rising content costs, is a problem, he added. Mahaney cut his rating for Pandora to “Neutral” from “Buy.” He also slashed his price target on the shares by $8, or 32 percent, to $17.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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