Pandora Revenue Falls Short of Estimates as Listeners Tune Outby
Quarterly sales of $343 million miss $351.7 million projection
Internet radio service said to have spurned bid from Liberty
Pandora Media Inc., the internet radio service that’s become the subject of heated merger speculation, posted second-quarter revenue that missed analysts’ estimates as active listeners fell.
The company posted a loss of 12 cents a share, excluding some items, according to a statement Thursday. That was smaller than the 15-cent average loss projected by analysts in a Bloomberg survey and larger than a year earlier. Second-quarter revenue rose 20 percent to $343 million, short of analysts’ projections of $351.7 million.
Pandora fell 9.6 percent to $10.85 at 7:30 a.m. in early trading in New York Friday.
Founder Tim Westergren, who returned as chief executive officer in March, is trying to almost quadruple sales to $4 billion by 2020 by steering the company into new businesses, such as ticket sales and concert promotion. That’s led to forecasts for wider losses. Pandora, which was exploring a possible sale, received an informal offer of $15 a share in recent months from Sirius XM Holdings Inc., which is controlled by John Malone’s Liberty Media, the Wall Street Journal reported. The company spurned the overture.
- Active listeners fell to 78.1 million from 79.4 million a year ago.
- Ad revenue grew 15 percent to $265.1 million, reflecting spotty gains in national advertising.
- Listener hours increased 7 percent to 5.66 billion from a year earlier.
With the recent acquisition of Rdio, Pandora is developing an on-demand product to offer alongside its internet radio service and compete more effectively with Spotify Ltd. and Apple Inc. The company views the addition as a way to keep increasing its user base and listener hours.
This quarter, Pandora forecasts sales of $360 million to $370 million, below the $378.2 million average of analysts’ estimates. The company forecasts earnings before interest, taxes, depreciation and amortization to range from a loss of $5 million to a profit of $5 million.
For the year, Pandora trimmed its sales outlook and now projects revenue of $1.39 billion to $1.41 billion, below Wall Street estimates, because of weakness in some national ad markets. The company projects an Ebitda loss of $50 million to $70 million.