July 23, 2015 / 8:15 PM / 2 years ago

Pandora raises full year forecast on higher ad sales

A screen displays the name of music streaming company Pandora on the floor of the New York Stock Exchange shortly after the start of trading in New York July 1, 2013. REUTERS/Lucas Jackson

(Reuters) - Online music streaming company Pandora Media Inc (P.N) raised its full year forecast and reported better-than-expected second quarter revenue as it signed up more subscribers and increased its advertising revenue.

Shares of the company, which uses streaming software that can predict a listener’s preferences, rose 3.7 pct to $14.40 in extended trading.

Pandora said active users rose about 4 pct to 79.4 million in the second quarter, from a year earlier. Total listener hours rose to 5.30 billion from 5.04 billion.

Listening hours have risen steadily since Pandora launched a smartphone and tablet app. In June it made it added its automated advertising service to its smartphone service.

Ad revenue rose 30.2 percent to $230.9 million, in the second quarter ended June 30, while subscription and other revenue rose to $54.6 million from $41.6 million.

Pandora gets about 81 percent of total revenue from advertising.

The company said it expects 2015 revenue of $1.175 billion-$1.185 billion, compared with its previous forecast of $1.16 billion-$1.18 billion

Pandora faces stiff competition from Spotify, Apple Inc’s (AAPL.O) Beats online streaming service, Google Inc (GOOG.O), and Amazon.com Inc (AMZN.O) in the fast-growing music streaming business.

The company forecast third quarter revenue of $310 million-$315 million, above average analysts’ estimate of $309.1 million.

The company’s net loss widened to $16.1 million, or 8 cents per share, in the second quarter ended June 30, from $11.7 million, or 6 cents per share, a year earlier.

Excluding items, Pandora earned 5 cents per share.

Revenue rose to $285.6 million from $218.9 million.

Analysts on average had expected earnings of 2 cents per share on revenue of $283.1 million, according to Thomson Reuters I/B/E/S.

Reporting by Kshitiz Goliya in Bengaluru; Editing by Simon Jennings and Rodney Joyce

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