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Pandora Results Top Estimates; Shares Tumble On Disappointing Outlook

Pandora Results Top Estimates; Shares Tumble On Disappointing Outlook
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Internet radio company Pandora Media, Inc. (P: Quote) said Tuesday after the markets closed that its third quarter net profit more than tripled from last year, helped by a strong growth in mobile revenue.

The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue.

"This quarter exceeded our expectations as we monetized mobile at record levels and grew total mobile revenue 112%," said Joe Kennedy, Chairman & CEO of Pandora.

However, the company forecast fourth quarter results below analysts' current consensus estimates and cut its full year outlook.

Pandora shares are currently losing 19.05% in after hours trading after closing the day's regular trading session at $9.45, up 49 cents or 5.47%. the shares trade in a 52-week range of $7.08 to $15.25.

For the third quarter ended October 31, 2012, the Oakland, California-based company reported net income of $2.1 million or $0.01 per share, compared to $638,000 or break-even per share for the year-ago quarter.

Excluding items, adjusted net income for the third quarter was $9.1 million or $0.05 per share, compared to $3.3 million or $0.02 per share in the prior year quarter.

On average, 23 analysts polled by Thomson Reuters expected the company to earn $0.01 per share for the third quarter. Analysts' estimates typically exclude special items.

Total revenue for the third quarter rose 60% to $120.01 million from $75.01 million in the same quarter last year. Twenty-three analysts had a consensus revenue estimate of $117.00 million for the third quarter.

Advertising revenue for the quarter jumped 61% year-over-year to $106.3 million, while subscription and other revenue surged 52% to $13.7 million.

Third quarter total mobile revenue jumped 112% year-over-year to $73.9 million.

Total listener hours grew 67% to 3.56 billion in the third quarter from 2.12 billion in the third quarter of last year. The growth rate is slower than in the previous two quarters.

The number of active users grew 47% year-over-year to reach 59.2 million at the end of the third quarter.

There were reports earlier this year that Apple Inc. (AAPL) is planning to develop a music streaming service that will rival Pandora. The move is said to be part of Apple's efforts to expand its dominant presence in digital music.

Looking forward to the fourth quarter, Pandora forecast revenue of $120 million to $123 million and an adjusted loss of $0.06 to $0.09 per share. Analysts currently expect the company to earn $0.02 per share on revenue of $130.27 million for the fourth quarter.

For fiscal 2013, the company now forecasts revenue of $422 million to $425 million and an adjusted loss of $0.09 to $0.12 per share. Previously, the company forecast revenue of $425 million to $432 million and an adjusted loss of $0.04 to $0.08 per share.

Analysts currently expect the company to report a loss of $0.06 per share on revenue of $429.15 million for the fiscal year 2013.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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