(Adds Chief Financial Officer comment on reinvestment, growth,
paragraphs 4 and 6)
July 24 Pandora Media Inc forecast current
quarter adjusted profit below analysts' estimates as it plans
to plow money back into the business. The company's shares fell
about 6 percent in extended trading.
Pandora forecast adjusted profit of 5-8 cents per share on
revenue of $235-$240 million for the third quarter ending
Analysts on average were expecting an 8 cents per share in
profit on revenue of $234.6 million, according to Thomson
Pandora Chief Financial Officer Mike Herring said in an
interview that adjusted profit forecast was because the company
plans to "reinvest aggressively."
Pandora faces stiff competition from Spotify, Apple Inc's
Beats online streaming service, Google Inc and
Amazon.com Inc in the fast-growing music streaming
business as downloads decline.
"There is no shortage of well-funded aggressive smart
competitors in the space," Herring said. "That said, there has
been for years and we have continued to grow market share."
Advertising revenue, where Pandora makes the bulk of its
money, jumped 39 percent to $177.3 million in the second quarter
helped by strong mobile advertising revenue growth. Total
revenue increased 43 percent to $218.9 million.
The company did raise its full year revenue forecast to the
range of $895 million to $915 million up from $880 million to
$900 million. It adjusted increased its profit expectations as
well to a range of 16 cents to 19 cents from a range of 14 cents
and 18 cents.
Pandora spent 40 percent more to acquire content in the
second quarter ended June 30. The company is investing more to
buy music licensing rights.
Pandora's net loss widened to $11.7 million, or 6 cents per
share, in the quarter ended June 30 from $6.9 million, or 4
cents per share, a year earlier.
Excluding items, the company earned 4 cents per share
beating analysts expectations by a penny.
Pandora shares closed up 4 percent at $28.72 on the New York
(Reporting by Soham Chatterjee in Bangalore and Jennifer Saba
in New York; Editing by Joyjeet Das and Grant McCool)