P: Pandora Stock Plunges on Weak Outlook

by Christopher Freeburn | April 25, 2014 11:07 am

A lower-than-expected second-quarter profit forecast[1] sent Pandora Media (P[2]) shares tumbling more than 14% in Friday morning trading.

[3]P stock fell after the streaming music service predicted current-quarter earnings between zero and 3 cents per P share. Wall Street had been looking for a second-quarter profit of 5 cents per P share, Bloomberg noted.

Pandora CFO Michael Herring said that Pandora’s “investment curve is higher than the Street expected. It is a lot of work to provide the best music service available.” During the first quarter, spending on content jumped to $108 million, up 26% over the year-ago period. while spending on Pandora marketing rocketed up 63%.

For the first quarter, P reported a loss of $28.9 million[4], less than the $38.7 million loss it posted in the prior-year quarter. Adjusted EPS showed a loss of 13 cents, slightly better than the loss of 14 cents that Wall Street had forecast. Revenue zoomed up 69%, hitting $194.3 million, easily beating the $177.7 million analysts had predicted, the Associated Press noted.

Last month, Pandora said it would increase subscription prices for new users to $4.99 a month[5], effective in May.

P stock closed at $28.20 per share on Thursday.

More Stocks on the Move:

• ABBV: AbbVie Beats Street on Soaring Humira Sales[6]
• UA, BEAM: Under Armour to Replace Beam in S&P 500[7]
• CAT: Caterpillar Stock Jumps on Forecast, Profits[8]

Source URL: https://investorplace.com/2014/04/p-pandora-stock-plunges-weak-outlook/

---