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Pandora Gives off Bad Vibrations

Internet radio company puts out a lackluster Q4 earnings report


Stifel Nicolaus analyst Jordan Rohan’s projections for Internet radio company Pandora (NYSE:P) got bumped around after the bell Tuesday.

After closing Tuesday around $14, Pandora was down around 14% in postmarket trading following the company’s less-than-stellar earnings report. Rohan had upgraded Pandora from hold to buy, with a price target of $18.

On its face, Pandora’s report sounds strong. Fourth-quarter revenues spiked by 71% to $81.3 million, and total listening hours came to 2.7 billion — up 99% from the year-ago period. The number of active users was up to 47 million, a 62% increase.

Unfortunately, Wall Street wasn’t happy with the results. The revenues still were short of expectations for $83 million, and an adjusted loss of 3 cents per share was worse than estimates of 2 cents.

Plus, it looks like Pandora’s problems will continue into the current quarter. Pandora is looking for revenue of $72 million to $75 million, short of the consensus view for $86.5 million. Pandora also expects a loss of 18 to 21 cents per share, which compares to an expected loss of 2 cents.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.

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