Despite solid figures, Pandora Media, the biggest Internet radio service, dropped in late trading after listener growth missed some analysts' estimates. Quarterly profit beat projections and the company raised its 2014 outlook.
Active listeners grew 7.5 percent to 76.4 million users in the second quarter, the company said. . That was slightly less than the 76.6 million estimate of Corey Barrett, an analyst at Pacific Crest Securities, and a projection of 77 million by Mark Mahaney at RBC Capital Markets.
However, Rich Greenfield, an analyst with BTIG, told Bloomberg in a telephone interview that usage was “stagnating.”
He added, “ I think that's the fundamental challenge -- competition has been starting to take its toll. That's going to scare the market for what's supposed to be a rapid-growth Internet company."
Larger companies are building services to compete with Pandora: such Google bought Songza Media and Apple's acquired Beats Electronics.
The number of Pandora listeners and the amount of time they spend using the service is little changed on a monthly basis from December to June, said Greenfield, who rates the stock a sell.
The stock fell 10.5 percent to $25.70 in extended trading after the results were announced. Earlier the shares rose 4.3 percent to $28.72 at the close in New York.
Second-quarter earnings came to 4 cents a share; analysts had predicted 3 cents, the average of 27 estimates compiled by Bloomberg. Sales grew 43 percent to $218.9 million. Mobile revenue rose 59 percent to $167.5 million. The company is among the top five mobile advertising platforms, with Google and Facebook in the lead, according to data compiled by Bloomberg.