A lower-than-expected second-quarter profit forecast sent Pandora Media (P) shares tumbling more than 14% in Friday morning trading.
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
, 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, effective in May.
P stock closed at $28.20 per share on Thursday.
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