Sirius Subscriber Rolls Bulge

Sirius Satellite Radio (SIRI) posted weaker-than-expected fourth-quarter financial numbers Wednesday morning, but its shares held steady as investors rallied around its solid subscriber growth.

For its fourth quarter ended Dec. 31, Sirius posted a loss of $148 million, or 14 cents a share, which is wider than the year-ago loss of $122 million, or $1.74 a share. The latest quarter's loss missed the Wall Street analyst consensus estimate, which had called for an 11-cent loss. Sirius' EPS figures are widely divergent because the company issued nearly 1 billion new shares in its recapitalization last winter.

Revenue rose to $5 million from $685,000 a year earlier, but again, the latest-quarter number fell well short of analysts' estimates in the $6.5 million range. Average monthly revenue per subscriber, or ARPU, was $8.59; excluding the effects of mail-in rebate programs, ARPU for the fourth quarter of 2003 was $10.80.

But if the financials were weak, Sirius fans were buoyed by the company's success in adding subscribers. Fourth-quarter net subscriber adds were 111,449, putting the company at 261,061 subscribers as of Dec. 31. Sirius added more than 86,000 subscribers from the retail aftermarket channel.

Sirius and rival XM Satellite (XMSR) have surged in the past year as investors have leaped aboard the satellite radio bandwagon. The companies charge $10 and up for monthly subscriptions to their mostly commercial-free radio broadcasts.

Bulls believe the medium has nearly unlimited growth potential, and seize on the companies' fast-expanding subscriber rolls as evidence. XM, for instance, notched its millionth subscriber late last year.

But bears note these outfits' cash-consuming ways and wonder if the business can ever expand to the point where either company, let alone both, is consistently profitable.

Sirius shares rose 4 cents Wednesday to $3.01.

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