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Pandora Surging Again on Better-Than-Expected Earnings, Strong Guidance

Posted
3/8/2013 10:54:00 AM
By: Benzinga
Referenced Stocks:P

Pandora Media (NYSE: P ) is on another major upswing in the aftermath of releasing positive earnings and guidance.

Benzinga reported on Thursday , the Internet radio giant surged around 22 percent in the after-hours of trading.

Earnings Details

The Oakland, California firm finished the fourth quarter with a loss of $0.04 per share. This figure edged the Wall Street consensus of a $0.05 loss.

Fourth quarter revenue finished at $125.1 million, topping analysts' expectations of $122.8 million. Notably, Q4 revenue improved by 54 percent year-over-year.

For the year, Pandora lost $0.08 per share, easily topping the Wall Street consensus of a $0.25 loss.

Full-year revenue finished at $427.1 million. This figure topped FY 2012 revenue by 56 percent.

Pandora Goes Mobile

Pandora saw impressive gains on the mobile front in both the fourth quarter and entire fiscal year.

Mobile listener hours grew 70 percent during the fourth quarter as compared to Q4 FY 2012. For FY 2013, mobile listener hours climbed 89 percent.

Revenue in this segment grew by even larger percentages. In the fourth quarter, mobile revenue closed at $80.3 million, topping the segment's Q4 2012 performance by 111 percent.

For the year, mobile revenue finished at nearly $256 million, topping the segment's FY 2012 performance by 105 percent.

Overall, approximately 60 percent of Pandora's revenue came from mobile listeners in FY 2013.

Strong Guidance

Pandora expects to close the first quarter of FY 2012 with a loss of $0.10 to $0.13 per share. If this pans out, the firm will easily top analysts' expectations of an $0.18 loss.

The company expects to generate $120 to $125 million during the first quarter, which would top the Wall Street consensus of around $119.5 million.

Full-year EPS should finish within the -$0.05 to $0.05 range, according to Pandora, which places it on target with analysts' hopes of a loss of $0.02.

Pandora expects revenue to round out at $600 to $620 million for the year, which would meet or exceed the Wall Street consensus of about $600 million.

A Short Squeeze?

Benzinga noted on Thursday that over one-fifth of Pandora's shares have been sold short, concluding that short sellers may run to cover their bets if earnings were better-than-expected. That earnings scenario has become a reality, so it will be interesting to see how short sellers respond to Pandora's market success on Friday.

Market Reaction

Pandora shot up over 23 percent at points on Friday morning. However, in the late morning hours, the stock appears to be on the backslide, albeit still at a comfortable gain for the day.

Pandora is up around 16 percent on Friday.

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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