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pandora nyseStreaming music service Pandora‘s third quarter earnings met Wall Street’s expectations  but still suffered a drop to its stock price in after-hours trading.

The company made a total of $75 million in revenue for the quarter (beating the $71.4 million estimate from analysts), which is up $8 million compared to the previous quarter. As for net income, Pandora stayed flat — also beat analysts’ estimates of a 1 cent per share loss.

Pandora’s guidance for the fourth quarter of 2011 is $80 to $84 million in revenue. The company predicts a non-GAAP net loss of 2-4 cents per share. Its guidance for the year is $273-$277 million in revenue, and a non-GAAP net loss of 2-5 cents per share — up from the 5-7 cent loss it reported in the previous quarter.

Fourth quarter guidance is for $80 to $84 million in revenue with non-GAAP net loss between 2 and 4 cents per share.  Fiscal 2012 guidance is $273 to $277 million in revenue with a non-GAAP net loss of 2 to 5 cents per common share. That’s up from a previous guidance of a net loss of 5-7 cents per share.

Pandora reported that people listened to 2.1 billion total hours for the third quarter of 2011, a 104 percent increase compared to the same period last year (1 billion hours). The service has 66 percent of the country’s internet radio market and 40 million active users.

The company is very optimistic about growing revenue through its Pandora for Business partnership with DMX as well as opportunities to grow local radio advertising revenue.

“We’re just now reaching the share that give us the opportunity to enter local radio advertising,” said Pandora CEO Joe Kennedy during a quarterly earnings call. He added that the company is in a good position with a presence in most of the major markets for local radio.

Despite reporting decent numbers for the quarter, Pandora stock still slid over three percent to $11.42 per share.

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