By Aishwarya Venugopal and Pushkala A
(Reuters) – Pandora Media Inc reported better-than-expected quarterly revenue as advertisers spent more on the online music streaming service amid stiff competition.
The company’s shares were up 1.4 percent in choppy after-hours trading on Monday. The stock was up 6 percent after the quarterly results but pared some gains after Pandora cut its full-year forecast on a conference call.
Pandora now expects its full-year revenue to range between $1.45 billion and $1.50 billion, compared with its previous forecast of $1.50 billion to $1.65 billion.
The lowered forecast reflects adjustments related to Pandora’s sale of its ticketing firm, Ticketfly, and the closure of Australia and New Zealand operations in June.
Analysts on average were expecting full-year revenue of $1.56 billion, according to Thomson Reuters I/B/E/S.
The company continues to pull in advertisers despite competition from Sweden’s Spotify, Apple Inc’s Apple Music, Google’s Play Music and Amazon.com Inc’s Amazon Music Unlimited.
“Going forward, we expect the trend in our advertising business to continue to improve,” interim Chief Executive Naveen Chopra said on the call with analysts.
Pandora’s advertising revenue rose nearly 5 percent to $278.2 million in the second quarter, exceeding analysts’ expectations of $268.4 million, according to financial data and analytics firm FactSet.
The company reported subscription revenue of $68.9 million, below analysts’ expectation of $72.8 million, according to FactSet.
Pandora is going through a management shakeup with its CEO Tim Westergren stepping down in June, less than a month after satellite radio company Sirius XM Holdings Inc invested $480 million in the company.
“The prior management was focused on subscriptions. They’re all gone,” Wedbush Securities analyst Michael Pachter said. “Let’s see who steps in as CEO and see what the strategy is.”
The company’s total revenue rose nearly 10 percent to $376.8 million, beating the average analyst estimate of $368.7 million, according to Thomson Reuters I/B/E/S.
Pandora’s net loss widened to $275.1 million, or $1.20 per share, in the quarter ended June 30, from $76.3 million, or 33 cents per share, a year earlier.
The latest quarter included a goodwill impairment charge of $132 million from a one-time write down related to the sale of Ticketfly.
Excluding items, Pandora lost 21 cents per share, smaller than analysts’ estimate of 24 cents.
Up to Monday’s close of $8.95, Pandora’s shares had fallen 31.4 percent this year.
(Reporting by Aishwarya Venugopal and Pushkala A in Bengaluru; Editing by Maju Samuel)
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