Pandora (NYSE:P) announced on Tuesday it’s earnings for the fourth quarter of 2012 and it’s fiscal report for the full year of 2012. The results, announced after the close of market, revealed revenue of $81.3million, for the quarter. the company had provided a guide of $80-$84 million for revenue in the fourth quarter and a guide of $273-$277 million for the financial year. Results from the third quarter showed revenue of $75 million, which exceeded analysts expectations at that time. That number was up $8 million from the second quarter.
The company’s shares closed at $14.29 on Tuesday showing the level of confidence investors had in the company’s coming report, a decrease from Monday’s close which at $14.66 was shows a rise of 46.5% in value since the start of the year. The valuation is still below the $16 IPO price however. Earnings per share for the fourth quarter showed a decrease of $0.03. In it’s guidance for the fourth quarter the company had expected a loss of $0.02-$0.04 per share. The company announced that in 2013 they are expecting loss of 11-16 cents per share, which has sent the shares plummeting.
Pandora faces many challenges in its rise. It is competing with and trying to displace many different mediums and current music listening fashion in order to succeed. It is competing directly with MP3 players, digital and analogue radio as well as traditional music listening technologies and other internet radio providers. As with so many of the recent tech IPOs and what will surely be a large issue in Facebook’s offering is a site’s ability to captivate and keep its users online over time as well as its ability to monetize its user base. Pandora logged over 2 billion listening hours in the fourth quarter and has a user base of around 40 million active users. Its ability to turn these numbers into revenue streams is the key question for investors.
Pandora went Public in the Summer of 2011 and its IPO raised an appreciable $235 million with share prices at $16. The company offers internet radio services and has control of a large part of the market. The company is currently expanding into the mobile and automobile industries with music services for these markets. The company currently accounts for about tw0 thirds of the total internet radio listenership inside the United States and is not yet currently available internationally.