Pandora Media 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% in extended trading.
Pandora forecast adjusted profit of 5-8 cents per share on revenue of $235-$240 million for the third quarter ending September. Analysts on average were expecting an 8 cents per share in profit on revenue of $234.6 million, according to Thomson Reuters. 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's Beats online streaming service, Google and Amazon.com 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% to $177.3 million in the second quarter helped by strong mobile advertising revenue growth. Total revenue increased 43% 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% 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% at $28.72 on the New York Stock Exchange.
Pandora forecast adjusted profit of 5-8 cents per share on revenue of $235-$240 million for the third quarter ending September. Analysts on average were expecting an 8 cents per share in profit on revenue of $234.6 million, according to Thomson Reuters. 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's Beats online streaming service, Google and Amazon.com 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% to $177.3 million in the second quarter helped by strong mobile advertising revenue growth. Total revenue increased 43% 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% 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% at $28.72 on the New York Stock Exchange.
