The Associated Press May 23, 2012, 6:13PM ET

Pandora 1Q loss triples but better than forecast

The net loss at Pandora Media Inc. tripled in the fiscal first quarter as the cost of acquiring music and marketing its services rose faster than revenue. But the results and its outlook for the year topped analysts' forecasts, and shares jumped.

The online radio service, which is based in Oakland, Calif., said its loss in the three months through April 30 grew to $20.2 million, or 12 cents per share, from a loss of $9.1 million, or 61 cents per share, a year ago.

Excluding the cost of paying executives with shares, the adjusted loss came to 9 cents per share, better than the 18 cents per share loss expected by analysts polled by FactSet.

Revenue grew 58 percent to $80.8 million, beating the $74.3 million expected by analysts. However, higher content acquisition, marketing and sales, and general costs pushed expenses up by nearly 80 percent to $100.9 million. That's what increased the losses.

Ad revenue grew 62 percent to $70.6 million, while subscription revenue rose 38 percent to $10.2 million.

Analysts expect Pandora's growth in ad revenues to eventually make up for its expenses.

Shares rose $1.59, or 15 percent, to $11.92 in after-hours trading following the release. That's still below its $16 IPO price from last June. Shares closed up 3.5 percent at $10.33 in regular trading.

Total listener hours grew 92 percent to 3.1 billion in the quarter, while its active user base grew 53 percent to 51.9 million. The company said it accounted for nearly 6 percent of all radio listening in the U.S., up from about 3 percent a year ago.

In the current quarter, which ends in July, Pandora expects a loss of 3 cents to 5 cents per share, excluding one-time items. Analysts expect a 3-cent loss. The company predicts revenue of $99 million to $101 million, bracketing the $100.7 million forecast by Wall Street.

For the full fiscal year, Pandora expects revenue of $420 million to $427 million, topping the $417 million analysts were looking for. It expects an annual adjusted loss of 7 cents to 11 cents per share, better than the 15 cents per share loss expected by analysts.


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