So much for a rosy outlook: Pandora stock plummeted 18 percent in trading after markets closed, as the digital music service projected increased losses for the current fiscal year.

Shares fell despite a strong fiscal third quarter for the company, in which revenue increased 60 percent to $120 million from the same period of 2011, and total listening hours grew by 67 percent.

Those numbers did little to distract investors from Pandora's dismal outlook for its current fiscal year, which runs through January, and for which the company is forecasting non-GAAP losses of 9 to 12 cents per share.

Based on a weighted average of 168 million shares, the per share projections in today's earnings release factors out to something between $15 to $20 million. When the company announced second quarter earnings in August, it projected losses at 4 to 8 cents per share.

On a conference call to discuss the earnings, Pandora executives said concern among advertisers over the effects of the looming fiscal cliff led the company to project a cold January for the company's bottom line.