Sirius-XM misses revenue numbers

North American pay-radio broadcaster Sirius-XM managed to fall a little short of its revenue estimates, in numbers released August 2. Revenues were $744 million, and the market consensus was that it would achieve about $752 million.

The much more attractive good news was that Sirius-XM ended the quarter-year with 21 million subscribers having added 452,172, which was better than most analysts’ expectations. Some thought the new adds might have been as low as 390,000. Consequently Sirius-XM stock rose 2.8 per cent in early trading August 2.

Indeed, its formal guidance is also improved. While it had expected to add 1.4 million net new subs this year, it now says that number will be closer to 1.6 million, with full year revenues of some $3 billion.

“Our results in the second quarter were strong, and we are proud of our record levels of subscribers, revenue, and adjusted EBITDA and growth in free cash flow. SiriusXM continues to perform well, and we are pleased to raise our subscriber guidance and, for the second time this year, our free cash flow guidance,” said Mel Karmazin, Chief Executive Officer, SiriusXM.

Highlights from the quarter include:
– Subscriber growth continues. Auto sales growth and higher OEM penetration year-over-year drove ending subscribers as of June 30, 2011 to 21,016,175, up 8 per cent from the 19,527,448 subscribers reported as of June 30, 2010. Self-pay net additions in the second quarter of 2011 were 362,663, up 19 per cent from 304,043 in the second quarter of 2010.
– Churn stable. Average self-pay monthly churn was 1.9 per cent (per month) in the second quarter 2011, compared to 2.0 per cent in the first quarter 2011 and 1.8 per cent in the second quarter of 2010.
– SAC improves. Subscriber acquisition cost (SAC) per gross subscriber addition was $54 in the second quarter of 2011, an 8 per cent improvement from the $59 reported in the second quarter of 2010.

“Demand for satellite radio continues to grow, with gross additions reaching the highest level of any quarter since the merger of Sirius and XM. Our all-time high OEM penetration rate is a reflection of the automakers’ satisfaction and their commitment to offer our service to their customers,” said Karmazin. “We intend to drive future growth through innovations to our satellite and Internet platforms, with the goal of better delivering our unparalleled content to our valued customers.”

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