Pandora Losing Listeners, Dollars as Revenue Misses Q2 Estimates

While Active Listeners Fell to 78.1M, Ad Revenue Grew 15% to $265.1M

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Pandora, the internet radio service that's become the subject of heated merger speculation, posted second-quarter revenue that missed analysts' estimates as active listeners fell.

The company posted a loss of 12 cents a share, excluding some items, according to a statement Thursday. That was smaller than the 15-cent average loss projected by analysts in a Bloomberg survey and larger than a year earlier. Second-quarter revenue rose 20% to $343 million, short of analysts' projections of $351.7 million.

Founder Tim Westergren, who returned as chief executive officer in March, is trying to almost quadruple sales to $4 billion by 2020 by steering the company into new businesses, such as ticket sales and concert promotion. That's led to forecasts for wider losses. Pandora, which was exploring a possible sale, received an informal offer of $15 a share in recent months from Sirius XM Holdings, which is controlled by John Malone's Liberty Media, the Wall Street Journal reported. The company spurned the overture.

Active listeners fell to 78.1 million from 79.4 million a year ago. Ad revenue grew 15% to $265.1 million, reflecting spotty gains in national advertising. Listener hours increased 7% to 5.66 billion from a year earlier.

With the recent acquisition of Rdio, Pandora is developing an on-demand product to offer alongside its internet radio service and compete more effectively with Spotify and Apple. The company views the addition as a way to keep increasing its user base and listener hours.

This quarter, Pandora forecasts sales of $360 million to $370 million, below the $378.2 million average of analysts' estimates. The company forecasts earnings before interest, taxes, depreciation and amortization to range from a loss of $5 million to a profit of $5 million.

For the year, Pandora trimmed its sales outlook and now projects revenue of $1.39 billion to $1.41 billion, below Wall Street estimates, because of weakness in some national ad markets. The company projects an Ebitda loss of $50 million to $70 million.

-- Bloomberg News

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