Pandora Media’s fiscal year is a month out of sync with the calendar, so the company is reporting Thursday on its fiscal Q2 (May-July). It will be the first quarterly report since the streaming company priced its IPO at $16 in June. It has since been as high as $26 and as low as $11 – most recently around $12.
Analyst estimates are all over the board on what Pandora’s stock should be worth, but there’s less disagreement over what the company will report for Q2. The Thomson First Call consensus is that revenues will be around $61 million, based on seven estimates ranging from $58 million to $64 million. No one expects the still-young company to report a profit. The consensus is for an earnings per share loss of three cents, although the estimates are from minus two cents to minus 20 cents.
RBR-TVBR has been most focused on Pandora’s operating cash flow results. The company actually got close to break even for its last fiscal year, which ended January 31, 2011. But negative cash flow grew substantially in fiscal Q1. That was filed a few weeks before the IPO, but didn’t dissuade investors from buying the stock.
Pandora executives have been focused on talking about revenue growth and listening growth in their public comments. They even recently pitched data which they have tried to equate with Average Quarter Hour (AQH) ratings for radio stations. In the company’s first quarterly conference call, however, they’re likely to have to deal with some nitty gritty questions from Wall Street analysts about overhead costs and whether the company has a plan to ever produce a profit.
RBR-TVBR observation: There is certainly some consumer interest in Internet juke box services such as Pandora – and there are plenty of them, since there’s no barrier to entry and no proprietary content. But is this a viable business model?
Radio operators: Time to get your digital strategy together and put that plan into action. You are now wasting valuable time for your growth as ‘Technology Waits for No One.’