NEW YORK (AP) — Shares of Pandora Media jumped 21 percent Thursday after the Internet radio service announced progress on its mobile devices and gave an upbeat third-quarter outlook.
THE SPARK: Pandora announced Wednesday that efforts to attract more listeners and sell more advertising on mobile devices are paying off. Mobile revenue soared 86 percent in the second quarter.
And its management predicted that the company's performance in the current quarter will be better than analysts expected.
Pandora, based in Oakland, Calif., makes money by selling advertising and with paid subscriptions from listeners who prefer their music commercial-free.
For the third quarter, the company anticipates adjusted earnings will range from break-even to 1 cent per share on revenue of $115 million to $118 million.
Analysts forecast adjusted earnings of 1 cent per share on revenue of $114.3 million, according to FactSet.
Pandora also raised its 2013 adjusted earnings and revenue forecasts.
THE ANALYSIS: Canaccord's Michael Graham raised the company's rating to "Buy" from "Hold" and lifted its price target to $16 from $13. The analyst said in a client note that Pandora's strong second-quarter results, which included faster subscription growth, should be sustainable.
Aaron Kessler of Raymond James was pleased with the company's second-quarter performance and its guidance. The analyst maintained an "Outperform" rating and $14 price target.
SHARE ACTION: Pandora Media Inc.'s stock soared by $2.15, or 21.3 percent, to $12.23 in afternoon trading. The shares have traded in a range of $7.83 to $15.98 over the past 52 weeks.