XM, Sirius Still Have Much to Prove

Turning back to Sirius, RBC Capital Markets analyst David Bank said that penetration rates for the company are growing, but the weak outlook from automakers will limit the near-term upside. Ford (F Quote), for instance, said its March U.S. sales fell 14.1%.

"Sirius installs will approach 70% of manufactured cars at Chrysler and Ford by year-end 2009 with penetration in other models such Volkswagon and Audi approaching 80%," said Bank in a note on Feb. 29. "But the outlook for auto sales is soft, and retail ... demand is anemic, so near-term upside to subscription estimates is probably limited."

Another key metric for both Sirius and XM's quarterly performance will be the average revenue per subscriber, or ARPU. While Sirius is expected to see ARPU tick higher in the first quarter, many analysts expect it to pull back for XM. And in the event the merger gains FCC approval, ARPU is not expected to improve much as the time progresses.

"We assume no ARPU synergies as the combo may have to agree to price restrictions to get a deal done," said Stifel Nicolaus analyst Kit Spring in a March 25 research note. "We calculate a net ARPU impact over time of a negative 2% to 5%, getting worse over time as the percentage of radios that are a-la-carte capable increase."