Pandora Media delivered its quarterly earnings report on Thursday, and investors were obviously less than impressed with the results. On Friday, shares of the streaming music company plummeted 25% to $5.59. Worse-than-expected revenue and weak guidance for its fourth quarter were the name of the game during Thursday’s company report. Management said it expected fourth-quarter revenue to be between $365 million and $380 million, which would represent a surprising year-over-year drop compared to fourth-quarter revenue of about $393 million in the year-ago quarter.
The big picture as of Friday: The company lost $450 million off its market cap, dropping from $1.79 billion to $1.34 billion.
On Thursday Pandora reported 73.7 million active users during the third quarter, which represents a 4% decline from a year ago, when factoring in its exit from Australia and New Zealand.
A story from the Motley Fool titled “Why Pandora Media Inc. Stock Plummeted Friday” suggested that, “Notably, as Pandora pointed out, after adjusting for Ticketfly and ANZ revenue, as well as about $10 million of political advertising revenue recognized in the fourth quarter of 2016, the midpoint of this guidance reflects 3.3% year-over-year revenue growth. But this is still notably lower than the 9% year-over-year revenue growth in Q3 when excluding ticketing.”
The investment website adds that, “it makes sense that investors are disappointed in Pandora’s weak outlook for its fourth quarter. Not only would revenue between $365 million to $380 million mark a year-over-year slump in revenue, but it would be significantly below the consensus analyst estimate for fourth-quarter revenue of about $412 million.”