NEW YORK (AP) — Shares of Pandora gained in premarket trading Friday after the Internet radio company's fourth-quarter results showed better trends in mobile and it posted a better-than-expected guidance.
"We think that Mr. Kennedy's departure is oddly timed, as the company is about to become profitable, is on the cusp of royalty renegotiations, and only recently hired a CFO. We believe Mr. Kennedy is a capable CEO, and his departure leaves a void in leadership at Pandora," said Wedbush analyst Michael Pachter in a research note.
Nonetheless, Pandora shares shot up jumped $2.98, or 25 percent, to $14.71 in premarket trading. The stock had risen about 9 percent in the past 12 months.
The company's fourth-quarter adjusted loss and revenue growth beat Wall Street expectations, and it predicted strong revenue growth this year.
Pandora, based in Oakland, Calif., went public in June 2011 and is unprofitable. It's been a hit with music lovers, but has big music-licensing costs, or royalties.
Citi analyst Neil Doshi raised Pandora's price target by $2 to $13, citing strong subscription and mobile revenue growth. But he kept a "Neutral" rating until he could see "clear sustained signs" that the company was able to make money off its mobile growth.
Excluding one-time items, Pandora Media Inc. posted a loss of 4 cents per share in the fourth quarter, while revenue climbed 54 percent to $125.1 million. Both beat Wall Street expectations.
For its current fiscal year, which ends in January 2014, the company expects revenue of $600 million to $620 million, with adjusted results ranging from a loss of 5 cents per share to profit of 5 cents per share.
Analysts polled by FactSet predicted revenue of $602 million and a loss of 1 cent per share.