Pandora Media Inc. (P:US), the Internet radio service, posted a fourth-quarter loss that was smaller than analysts predicted as sales exceeded forecasts. The shares soared 18 percent in extended trading.
Excluding items, the loss was 4 cents a share, smaller than the 5-cent loss seen by analysts, the average of 20 estimates (P:US) compiled by Bloomberg. The net loss grew to $14.6 million, or 9 cents, from $8.18 million, or 5 cents, a year ago, Oakland, California-based Pandora said today in a statement (P:US).
Pandora rose 18 percent to $13.81 after the results were announced. The stock gained 0.6 percent to $11.74 at the close in New York after Apple Inc. delayed the start of a competing service until later this year. It has gained 28 percent in 2013.
Pandora is limiting users of mobile devices to 40 hours of free listening a month to contain music costs and is backing U.S. legislation to lower royalty payments. The company said fourth-quarter ad sales rose 51 percent to $109 million, while royalty payments ballooned 59 percent to $77 million. Pandora is opening sales offices in the 25 biggest radio markets to accelerate ad-revenue growth.
Revenue in the quarter ended Jan. 31 climbed 54 percent to $125.1 million, exceeding the $122.8 million average of analysts’ estimates.
By May, Pandora will be competing directly with conventional stations for the first time on the radio industry’s biggest advertising services, gaining better access to the $14 billion market.
The services will provide Pandora’s audience ratings alongside to those of stations and let buyers place ads, Chief Executive Officer Joe Kennedy said in an interview this month.
At the end of last month, Pandora had 67.7 million active listeners, amounting to 8.5 percent of total U.S. radio, the company said.
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