PANDORA STOCK PRICEY AS STREAMING RADIO COMPETITION HEATS UP $P $AAPL $GOOG $MSFT

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Pandora, the popular Web radio service, reported impressive earnings after the close Thursday, recording second quarter EPS of $0.04 vs. consensus forecast for $0.02. Revenues of $157.4 million topped analysts’ consensus expectation for $156.24 million.

For the third quarter, Pandora projects Q3 EPS of $0.03 to $0.06 vs. $0.08 previously expected by analysts. The company projects Q3 revenues of $174 million – $179 million while Wall Street had that number at $170.2 million.  For 2014, Pandora sees EPS of $0.00 to $0.05 vs. a prior $0.04 consensus, with revenues of $640 – $655 million vs.forecasts for $633 million.

The earnings report and the conference call revealed some impressive metrics as outlined below.

  • Mobile advertising revenue per 1,000 listener hour increased 58% year over year.
  • Total TOT +2.28% mobile revenue (non-GAAP) increased 92% year over year.
  • Total listener hours increased 18% year over year.
  • The company has 7% share of the national radio market.
  • In July, total listening hours were 1.28 billion or an impressive 17 listening hours per average user.

There is no denying that the forgoing statistics are impressive.  Pandora is executing well.  It also announced that it is eliminating the 40 hour cap for free listeners, a reasonable step in view of upcoming competition from Apple AAPL, with its competing iTunes Radio that may dent Pandora’s rosy forecasts.

After a detailed review of iOS 7, I find iTunes Radio to be very similar to Pandora. Deep integration of iTunes Radio in iOS is something that Pandora cannot match, but Pandora does have an edge over Apple for those listeners who are not using Apple devices. For the time being, Pandora is likely to maintain or even increase its market share among listeners using Google GOOG  (GOOG) operating systems such as Android or Microsoft (MSFT) Windows based devices or PCs…Read more at Forbes

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