Pandora Media Inc. (P), the Internet radio service, rose as much as 26 percent in extended trading after fourth-quarter results exceeded analyst' estimates, spurred by rising advertising and subscriber revenue.
Pandora rose to $14.75 after the results. The stock gained 0.6 percent to $11.74 at the close in New York after Apple Inc. delayed a competing service until later this year.
Fourth-quarter ad sales rose 51 percent to $109 million, the company said today in a statement, while royalty payments increased 59 percent to $77 million. Pandora is opening sales offices in the 25 biggest cities to accelerate revenue growth in the $14 billion local radio market and is limiting free use on mobile devices to contain music costs.
“We continue to monetize mobile at record levels and exceeded our expectations for the quarter,” Joe Kennedy, chairman and chief executive officer, said in the statement.
Excluding items, Oakland, California-based Pandora posted a loss of 4 cents a share in the quarter ended Jan. 31, smaller than the 5-cent loss seen by analysts. Revenue rose 54 percent to $125.1 million, beating the $122.8 million average of 20 estimates.
The net loss in the fourth quarter grew to $14.6 million, or 9 cents, from $8.18 million, or 5 cents, a year ago, Pandora said in a statement.
This quarter, the company forecasts sales of $120 million to $125 million, more than the $118.6 million seen by analysts. Excluding items, the company predicts a loss of 10 cents to 13 cents a share, compared with the 10 average estimate of analysts.
By May, Pandora will be on the radio industry’s biggest advertising services, giving them the same access to marketers as conventional radio stations. The services will provide Pandora’s audience ratings alongside to those of stations and let buyers place ads, Kennedy said in an interview this month.
At the end of last month, Pandora had 67.7 million active listeners, amounting to 8.5 percent of total U.S. radio, the company said.
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