NEW YORK (TheStreet) -- After plummeting on Thursday following soft guidance, Pandora (P) managed to reclaim some ground on Friday. On Tuesday, competitor Sirius XM (SIRI) beat expectations in its own earnings release.
By market close, Pandora was 6.6% higher to $34.34, but 4.8% lower for the week. Sirius added 1% to $3.48 over Friday, but lost 2.7% since Monday.
Oakland, Calif.-based Pandora issued full-year guidance for net income between 13 cents and 17 cents a share. Analysts surveyed by Thomson Reuters had expected net income of 19 cents a share.
In the first quarter ended March, management anticipates a loss of 16 cents to 14 cents a share, compared to a forecast loss of 12 cents. Lower profits are the result of rising costs as the company expands its market share.
In January, Oakland-based Pandora active listeners dropped nearly 4% from December, a result of seasonal fluctuations, but were up 12% from a year earlier.
Guidance overshadowed Pandora's fourth-quarter results which came in better than expected. The company reported fourth-quarter net income of 11 cents a share on $200.8 million in revenue. Analysts anticipated earnings of 7 cents a share on sales of $201.1 million.
On Tuesday, Sirius XM posted record full-year revenue of $3.8 billion, 12% higher than a year earlier, and fourth-quarter sales of $1 billion. Total sales exceeded analysts' full-year and fourth-quarter expectations of $3.78 billion and $981.9 million, respectively.
Net income of 1 cent a share missed consensus by a penny. Full-year earnings of 6 cents a share was just shy of the 7 cents a share analysts had expected.
Management reiterated existing 2014 guidance of revenue of more than $4 billion and net subscriber additions totaling 1.25 million.
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TheStreet Ratings team rates SIRIUS XM HOLDINGS INC as a Buy with a ratings score of B. The team has this to say about their recommendation:
"We rate SIRIUS XM HOLDINGS INC (SIRI) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SIRI's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Net operating cash flow has increased to $302.24 million or 37.49% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.65%.
- The gross profit margin for SIRIUS XM HOLDINGS INC is rather high; currently it is at 65.01%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.54% trails the industry average.
- SIRIUS XM HOLDINGS INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SIRIUS XM HOLDINGS INC increased its bottom line by earning $0.53 versus $0.07 in the prior year. For the next year, the market is expecting a contraction of 86.8% in earnings ($0.07 versus $0.53).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: SIRI Ratings Report
TheStreet Ratings team rates PANDORA MEDIA INC as a Sell with a ratings score of D. The team has this to say about their recommendation:
"We rate PANDORA MEDIA INC (P) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share."
- You can view the full analysis from the report here: P Ratings Report