“Shares of Pandora Media have been utterly decimated, down by as much as 40% at the low, following a dismal earnings release,” Evan Niu writes for The Motley Fool. “While revenue put up a seemingly impressive 30% increase to $311.6 million, the company’s losses completely exploded. We’re talking about $85.9 million in red ink, or $0.40 per share, which is quite a bit worse than the $2 million net loss a year ago.”
“To be fair, most of this loss can be explained by a one-time settlement that Pandora negotiated with the record labels during the quarter. Pandora has agreed to a $90 million settlement related to using songs created before 1972. This is the primary reason why content acquisition costs skyrocketed in the third quarter. Pandora is recording the charge now, paying $60 million this month, and paying the rest in installments throughout next year,” Niu writes. “Worse yet, Apple launched its new Apple Music streaming service right as the quarter started, which does make the sequential comparisons that much more potent.”
“Monthly active listeners inched 2% higher to 78.1 million, while listener hours increased 3% to 5.14 billion. But those are year-over-year comparisons that Pandora is citing, and a sequential comparison is likely more relevant at this point considering the launch of Apple Music,” Niu writes. “Pandora has now given back much of those gains, and it lost 1.3 million active listeners sequentially.”
Read more in the full article here.
Apple is going to put the hurt on Pandora – November 10, 2014