Revenues Rise for Pandora, So Does Share Price

Music Key
Source: Thinkstock
Pandora Media Inc. (NYSE: P) reported fourth quarter and full year 2013 results after markets closed today. For the quarter, the Internet radio company posted an adjusted diluted earnings per share (EPS) loss of $0.04 on revenues of $125.1 million. In the same period a year ago, the company reported an adjusted EPS loss of $0.03 on revenues of $81.3 million.Fourth-quarter results compare to the Thomson Reuters consensus estimate for an EPS loss of $0.05 on $122.81 million in revenues.

For the full year, Pandora reported an adjusted EPS loss of $0.08 on revenues of $427.1 million, compared with a loss of $0.02 in 2011. The consensus estimates called for a full-year EPS loss of $0.09 on revenues of $424.91 million.

On a GAAP basis, the company reported a quarterly diluted EPS loss of $0.09 and a full-year EPS loss of $0.23. Adjusted earnings excluded $6.89 million in stock-based compensation expense. In the same period a year ago, stock-based compensation expense totaled $3.45 million.

The company’s CEO said:

We closed the year with a record 8% share of total U.S. radio listening and record mobile monetization that cemented our leadership in mobile advertising. We have completed our technology integration with radio ad buying platforms and are rolling it out to the market. Pandora has been hiring top talent in local radio markets to further increase our share of the $15 billion radio ad market. We are now effectively the largest radio station in almost every major market and begin fiscal year 2014 with extraordinary momentum.

For the first quarter of its 2014 fiscal year, Pandora guided revenue at $120 to $125 million and an adjusted EPS loss of $0.10 to $0.13, again attributed to stock-based compensation expense. The consensus estimate called for revenue of $130.3 million and EPS of $0.02.

Pandora’s quarterly advertising revenue grew more than 56% year-over-year to $109 million, while subscription revenue rose 74% to $16.1 million. Total listening hours rose more than 50% to 4.05 billion in the fourth quarter.

Oddly enough, today’s report is not substantially different from the company’s third quarter results. The big difference is that expectations have been reset. After reporting third quarter results, shares fell nearly 20%. Today, shares are trading up more than 22% in the after-hours market at $14.34, which would set a new 52-week high. The current range is $7.08 to $13.50. The consensus target price for the shares was around $11.40 before today’s report.

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