Pandora Media's user growth slowed to 5.2% in the third quarter, the company said in its latest earnings report.

Active listeners for the Oakland, California-based company grew to 76.5 million from 72.7 million a year ago, when Pandora reported user growth of 25%. The figure stood at 76.4 million in June, after 7.5% growth in the second quarter.

Listener metrics are a focus because the company is under assault by deep-pocketed rivals from Apple to Google. Pandora is focused on converting usage into revenue, Chief Financial Officer Mike Herring said.

"We needed to get monetization in place first before looking to grow listeners," Mr. Herring said. "We're relatively new to this marketing, customer-acquisition world, and we do have ambitions to grow users significantly in the U.S."

Pandora shares are down 13% this year through yesterday.

Despite the decelerating listener growth, the company, which started a branding campaign in September, reported revenue and profit that beat analysts' estimates. Its forecast for fourth-quarter results exceeds analysts' projections.

Mobile devices
Those results weren't sufficient given Pandora's valuation relative to earnings, Scott Kessler, an analyst with S&P Capital IQ Inc., said in an interview.

"When you have a stock trading at this kind of multiple, folks are expecting the company will significantly exceed estimates -- not slightly beat forecasts," Kessler said.

Revenue increased 42% to $239.6 million in the third quarter, the company said in a statement. That beat analysts' average estimate of $238.5 million. Mobile devices, where 84% of listening occurs, now contribute 78% of all revenue.

Profit, excluding some items, was 9 cents a share, versus an estimate for 8 cents.

Total listener hours increased 25% to 4.99 billion from a year earlier, though they fell slightly from the second quarter's 5.04 billion hours.

~ Bloomberg News ~