Pandora Throws Investors for a Loop

NEW YORK (TheStreet) -- Pandora (P) posted a strong earnings report Thursday after the close, but investors were unhappy with the outlook for the upcoming quarter, and were shedding the stock as a result.

For the first quarter of 2014, Pandora reported a loss of 13 cents per share on revenue of $180.1 million in non-GAAP accounting. On a GAAP basis, the company reported a loss of 14 cents a share. Analysts were expecting a non-GAAP loss of 14 cents on revenue of $175 million.

Despite the beat, Pandora lowered guidance for the current quarter to between breakeven and a profit of 3 cents a share. Analysts have been expecting the company to report a profit of 5 cents a share for the second quarter. For the full year, the company raised its guidance by a penny a share to earnings of between 14 cents and 18 cents, from a previously estimated range of 13 cents to 17 cents.

The company reported total listener hours for the first quarter grew 12% to 4.8 billion over the same period last year. Active listeners rose 8% to 75.3 million.

Total revenue was up 69% over the same period last year, with a advertising revenue making the bulk of that. However sales and marketing costs also rose 63% to $61.9 million for the quarter, indicating it may be getting harder to grow the company's market share. Total operating expenses rose 73% over the same period last year. Total cost of revenue, which includes content acquisition costs, was up 30% at $123.25 million.

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