The Revenue of Pandora Radio Tops Estimates as Listener Hours Increase

The Revenue of Pandora Radio Tops Estimates as Listener Hours Increase

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.

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