Pandora Plummets on Guidance

Shares of Pandroa P spiked sharply lower on Tuesday after the company reported earnings. In after-hours trading, at one point, shares were down well over 20 percent. The Internet radio company actually exceeded analyst expectations for the third quarter, reporting earnings per share of $0.05 -- more than the $0.01 that the Street was expecting. Revenue came in at $120 million, more than the consensus estimate of $117 million. Rather, what doomed Pandora was its guidance. Pandora guided fourth quarter EPS at a loss of $0.09-0.06 -- analysts were expecting a gain of $0.02. At the same time, Pandora guided revenue lower as well, saying that its fourth quarter revenue will come in at $120-123 million, less than the $130.2 million that was expected. Further, Pandora lowered its view for the full-year. Pandora said its earnings for the fiscal year would come in between a loss of $0.12-0.09. The company had previously said it expected a loss of only $0.08-0.04, while a loss of $0.06 is what analysts were anticipating. Since going public in the first half of 2011, Pandora has largely performed poorly, down about 30 percent in its history as a publicly traded company. Investors have raised concerns about Pandora's future profitability. There's also the lingering issue of competition: Apple AAPL is thought by many to be preparing to launch a competitor to Pandora's internet radio, perhaps as early as next month. Pandora is heavily shorted, with a short float over 20 percent. Shares closed on Tuesday at $9.45, but will likely open significantly lower on Wednesday.