The first quarter sales and revenue of Pandora Radio Inc.- the Internet radio leader, beat the estimates of analysts as listeners spent more time on the service, increasing their listening hours and allowing the money-losing company enough opportunity to develop newer businesses such as on-demand music and ticketing.
The Oakland California-oriented Pandora Radio app reported in recent news that the revenue increased 29 percent to $297.3 million, more than the $285.2 million average of estimates brought together by Bloomberg. The report stated further that Pandora Radio posted a loss of 20 cents per share, exclusive of items, compared with forecasts of analysts for a 32-cent loss.
The cause of the increase in Pandora Radio app increase in estimates was due to the fact that:
- Active listeners from 79.2 million to 79.4 million in one year ago.
- The overall listener hours grew 4 percent to 5.52 billion.
- The first-quarter loss prior to depreciation, amortization, taxes and interest, amounted to $57.4 million, unlike the February forecast of the company for a loss of $65 million to $75 million.
Pandora Radio unveiled an expensive; five-year plan in February to quadruple yearly sales to $4 billion by 2020. It came with big challenge and high price. As the company prepared to go head-to-head for music with Apple Inc., Spottily Ltd and YouTube, forecasts for a $50 million profit this year vaporized. On the other hand, Pandora retained Morgan Stanley to consider alternatives like people with knowledge of the matter said at the time, a probable sale, and restored the role of the chief executive to Tim Westergren, the co-founder.
The outcomes allow Pandora Radio executives to inform investors that despite the lack of new users buying them time to execute the strategy, the Internet radio business is developing at a good pace.
Pandora forecasts revenue of $345 million to $355 million this quarter, unlike the estimates of $350.3 million by the analysts. The company however projects a possible loss of $20 million to $30 million, above the average of $18.1 million loss estimated by analysts. Pandora now projects revenue of $1.41 billion to $1.43 billion for the year.
Pandora increased 4.8 percent to $9.90 in comprehensive trading subsequent to when results were declared. The stock dropped 0.1 percent to $9.44 at the close in New York and has declined by 30 percent this year.
However, Pandora is expanding beyond online radio to ticket sales, concert promotion and on-demand streaming to engage its users better and continue to grow, even as competing services from Spotify and Apple add users.