This Day On The Street
Continue to site
ADVERTISEMENT
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

SiriusXM Drives Toward $4 a Share

NEW YORK ( TheStreet) -- After being a top stock market performer in 2012, SiriusXM Radio's (SIRI - Get Report) better-than-forecast second-quarter earnings and guidance indicates the satelite radio giant may be poised to see its shares outperform once more.

Heading into 2013, the question was whether SiriusXM could see its shares move beyond $3. Now, after a strong first half to the year, the company is on the way to a $4 share price, as churn rates fall and a strong new and used car market drive new subscriptions.

SiriusXM reported record second-quarter revenue of $940 million, up 12% year-over-year as top and bottom line earnings beat Wall Street consensus estimates. The company also saw its income before income taxes rise 47% to $202 million in the second quarter.

"SiriusXM's second quarter results reflect record performance on almost every vital metric: the 25 million subscriber milestone, record revenue, adjusted EBITDA and adjusted EBITDA margin," Jim Meyer, SiriusXM CEO, said in a statement.

"We grew our revenue at double digit rates for the sixth consecutive quarter while being very mindful of our costs as we invest in advanced IP and telematics platforms designed to provide more services to our subscribers and automakers."

The company also increased its guidance for earnings before interest, taxes, depreciation and amortization and said it repurchased 195 million shares in the second quarter. Year-to-date, SiriusXM has repurchased $1.3 billion worth of shares, helping to lower its highly diluted share count.

"Our increase in adjusted EBITDA guidance speaks to our excellent first half performance as well as our outlook for further growth later this year," Meyer said.

SiriusXM shares were trading higher by nearly 2% to $3.75 in pre-market Thursday trading. Year-to-date SiriusXM shares have gained nearly 30% and one-year share price gains are approaching 80%.

While earnings were significantly stronger than expected, Evercore Partners analyst Brian Kraft said key questions on the company's conference call include clarity on the sustainability of SiriusXM's share repurchases and the company's low churn rate for the second quarter.

SiriusXM said self-pay churn was 1.7% in the second quarter, the lowest in over four years, while the company maintained its automotive conversion rate at 45%. Both metrics were above Kraft of Evercore's estimates.

Expect a strong second-half if SiriusXM can maintain its low churn rate and a continued benefit from recovering markets for new and used cars.

-- Written by Antoine Gara in New York

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!
SYM TRADE IT LAST %CHG
SIRI $3.95 -0.38%
AAPL $132.65 1.82%
FB $81.91 0.47%
GOOG $555.39 -1.70%
TSLA $231.69 6.10%

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs