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Pandora's Shares Plunge 11% on Weak Sales

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Pandora on Thursday missed Wall Street’s revenue estimates for the third quarter and the forecast for the current quarter as the online music streaming service provider struggles to bring more advertisements to its platform.

Shares of the company p , which faces stiff competition from Apple’s Apple Music, Alphabet’s Google Play Music and Sweden’s Spotify, plunged nearly 11% to $6.6 after-market trading.

Pandora forecast current-quarter revenue between $365 million and $380 million, below the analysts’ estimate of $412.9 million, according to Thomson Reuters I/B/E/S.

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“One consistent theme I’ve heard from advertisers is that we don’t have all of the features they need to easily transact with us and drive their campaigns,” CEO Roger Lynch said in a post-earnings call.

“This is starting to have a material impact on our revenue.”

The company said advertising revenue rose nearly 1% to $275.7 million in the quarter, taking a hit from shutdown of its Australia and New Zealand operations.

Advertisement revenue, which accounted for about 73% of total revenue, missed analysts’ average estimate of $289.3 million, according to financial data and analytics firm FactSet.

The company, in which SiriusXM invested $480 million and now has a 15.9% stake, has never reported a profit on an annual basis.

“We expect market conditions in retail, CPG and auto accounts to remain challenging, resulting in continued pressure on our advertising revenues,” CFO Naveen Chopra said.

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Pandora, however, added more paid subscribers to its services. It rose 7% sequentially to 5.19 million.

That number beats analysts’ estimate of 5.04 million subscribers, according to financial data and analytics firm FactSet.

The company’s total listener hours fell to 5.15 billion in the third quarter from 5.40 billion a year earlier.

“There is no indication that they are on the verge of turning their user growth around and subscriber growth is too slow to get them to profitability in the near term,” Michael Pachter, analyst with Wedbush Securities, told Reuters.

Total revenue rose 7.6% to $378.6 million in the quarter ended Sept. 30.

Pandora‘s net loss available to common stockholders increased to $84.6 million, or 34 cents per share, in the quarter, from $61.5 million, or 27 cents per share, a year earlier.

Excluding items, it posted a loss of 6 cents per share.

Analysts on average had expected a loss of 8 cents per share and revenue of $380.6 million.

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