This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Some Sirius Humble Pie

NEW YORK ( TheStreet) -- I'm going to cut through the chase -- I was wrong on Sirius XM's (SIRI - Get Report) expectations for the quarter.

For as much as I have beaten the company up since its fourth-quarter earnings report, I think Sirius deserves a considerable amount of credit for what it has demonstrated over the past three months -- particularly in face of rising household budgets due to an increase in the fuel costs. I have always maintained that Sirius XM shares a lot of similarities with another subscription service in Netflix (NFLX - Get Report) -- one that recently announced not only a decline in subscribers but went on to suggest that subscriber growth was no longer its focus.

However, what Sirius apparently does not share with Netflix is its ability to execute in the face of rising competition from Pandora (P) and other IP delivery platforms. The company also demonstrates that, in addition to prevailing and overcoming pessimism from the likes of me, it has proven that its business model is just good enough to navigate through macro-economic issues. But does that now make it a good investment?

The Recent Quarter

The period ending in March, the company reported revenue of $805 million -- representing an increase of almost 0.2% above the $803.83 million it reported in the same period of a year ago.

Follow TheStreet on Twitter and become a fan on Facebook.

Remarkably, this was the fourth consecutive quarter in which the company has demonstrated an increase in revenue. Net income was $107.7 million, or 2 cents a share, compared with $78.1 million, or 1 cent a share, a year ago.

So for as much as I have criticized its business model, I think it is more than fair for me to point out that in many respects, its business is indeed working.

What is also worth pointing out is that as much as its "modest" price increase raised concerns, it seems it was precisely that that helped lifted the company's higher-than-expected profit. Even more impressive was the fact that the company grew subscribers by over 404,000 for the quarter. Although it was 4% below my "success target" of 420,000, it did top analyst expectations of 400,000.

Sirius ended the quarter with 22.3 million subscribers and I think the company certainly did enough to avert any notions that subscribers were going to churn out in a mass exodus. As far as guidance is concerned, the company now expects a net increase in subscribers of 1.5 million.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
LMCA $38.08 0.00%
NFLX $571.55 0.00%
SIRI $3.88 0.00%
AAPL $124.75 0.00%
FB $80.78 0.00%


DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs