Pandora Shares Fall Despite Better-Than-Expected Earnings

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Pandora CEO Brian McAndrews

The digital music service says that listening hours in the first quarter grew 12 percent year-over-year to 4.8 billion.

Shares of Pandora Media were sinking as much as 9 percent in after-hours trading on Thursday, even though the digital-music company posted quarterly earnings that exceeded the expectations of analysts.

Pandora said Thursday that it lost $28.9 million during the first quarter, or 13 cents a share when adjusted, which is a penny better than predicted. Revenue was $194.3 million, well ahead of the $177.7 million that analysts expected.

In the same quarter a year ago, Pandora lost 22 cents a share on $115.1 million.

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Also on Thursday, the company raised its full-year guidance, predicting it will earn up to 18 cents a share on up to $900 million in revenue.

During the regular session Thursday, shares of Pandora were up 3 cents to $28.20.

Pandora said it had 75.3 million active listeners at the end of March, up 8 percent at the same time last year. Listening hours in the first quarter grew 12 percent year-over-year to 4.8 billion.

"We will continue to invest aggressively to extend our leadership position and drive forward the future of radio," Pandora CEO Brian McAndrews said.