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Pandora 4Q profit rises; shares fall on outlook

Pandora Media Inc. said Wednesday that its fourth-quarter net income quintupled from a year ago as revenue from subscription fees and advertising rose. But the Internet radio company's first-quarter outlook and full-year revenue guidance missed Wall Street expectations, and its shares fell sharply in after-hours trading.

The Oakland, Calif.-based company said net income rose to $9 million, or 4 cents per share, in the three months ended Dec. 31. That compares with net income of $1.63 million, or 1 cent per share, in the same quarter the year before.

Adjusted to remove one-time items, the company had earnings of 11 cents per share. Analysts expected earnings of 8 cents per share, according to FactSet.

Revenue jumped 50 percent to $200.4 million from $131.5 million. Analysts expected revenue of $199.8 million.

For the first quarter, Pandora expects a loss between 14 cents and 16 cents per share on revenue between $170 million and $176 million. Analysts expected a loss of 12 cents per share and revenue of $173.6 million.

For 2014, it expects earnings between 13 cents and 17 cents per share on revenue between $870 million and $890 million. Analysts expect earnings of 17 cents per share and revenue of $895.5 million.

Pandora said fourth-quarter advertising revenue rose 39 percent from the same quarter a year ago to $162 million. Subscription and other revenue more than doubled to $38.4 million. The company said users listened to Pandora for 4.54 billion hours in the fourth quarter, up 16 percent from the year before.

In after-market trading, shares fell $2.82, or 8 percent, to $33.01. They closed at $35.83 Wednesday.

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