Sell SIRI, Buy P on Another Ho-Hum Earnings Report

NEW YORK (TheStreet) -- TheStreet's James Rogers provided a fine recap of this morning's Sirius XM (SIRI) earnings release. Mel Karmazin started off the ensuing conference call the same way he always does, boasting about churn, subscriber additions, free cash flow, strength in an uncertain economy and increasing auto sales.

Mel Karmazin, CEO of Sirius XM

Shortly thereafter, the stock market did what it often does on apparently "good" news from Sirius. It watched a gap up at the open, as SIRI loyalist longs and other retail suckers made the cardinal error of buying out of the gate, only to send the stock into its familiar stagnation mode within just a couple of hours.

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I have seen this story play out so many times. Now, the bulls will claim that the bears are on the take from hedge funds. They'll lament SIRI's range-bound movement and eventual downward slide, blaming it all on evil market makers.

You have seen this story before as well. And, unless you have come to the point where you treat this stock like your favorite sports team, you're certainly not dumb enough to fall for it.

SIRI tends to perform like this because, time after time, Karmazin infers he is going to continue to do what he has always done. To his credit, he does it well. He always has. He knows how to run a business. He could teach MBA students how to do likewise in his sleep. Most, however, will not be talented enough to execute like Mel. And that's fine. Every company must, to a certain extent, stay true to its core and impress in the here and now.

The big problem at Sirius is that Karmazin treats the future like an afterthought.

Toward the end of his opening presentation and at the end of call's Q&A session, Mel told us about his company's "big" multiplatform plans. Here's a taste of what he had to say:

In general, we don't believe that the IP business for audio content, the radio content business, where the royalty fees are so extraordinarily high and you are at the mercy of advertising revenue, particularly as the advertising moves toward the smartphone and the limited opportunities that you have to monetize that through different types of advertising. So we're not big fans of it. On the other hand, we are very big fans of giving our subscribers what they want, not just in the car. So you should think of our 2.0 strategy as being to super-serve our subscribers.

Investors should heed two words at this point: Run Away.

Generally, when you invest in your business you expect a return. By "super-serving our subscribers," but not doing meaningful things to attract new ones or open up some other lines of revenue, you'll be hard-pressed to generate the types of results Wall Street wants to see.

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