NEW YORK (TheStreet) -- Sirius XM Holdings (SIRI - Get Report) rose as the market opened Thursday after the satellite radio provider reported first-quarter earnings that surpassed analysts' expectations.
The company posted an 11% year-over-year revenue increase to $997.7 million from $897.4 million thanks to additional subscribers that remained with the service after a promotional period. This figure beat the estimate of $994.6 million from analysts polled by Thomson Reuters I/B/E/S.
Net income dropped to $93.9 million, or 2 cents a share, from $123.6 million, or 2 cents a share, in the same period one year earlier.
The company added 173,480 net self-pay subscribers in the quarter, which increased the total subscriber number to 25.8 million.
The stock was up 0.63% to $3.19 at 9:41 a.m. on Thursday.
Separately, TheStreet Ratings team rates SIRIUS XM HOLDINGS INC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SIRIUS XM HOLDINGS INC (SIRI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and premium valuation."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SIRI's revenue growth has slightly outpaced the industry average of 3.8%. Since the same quarter one year prior, revenues rose by 12.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $358.58 million or 22.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.16%.
- The gross profit margin for SIRIUS XM HOLDINGS INC is rather high; currently it is at 60.37%. Regardless of SIRI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.51% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 58.3% when compared to the same quarter one year ago, falling from $156.25 million to $65.20 million.
- You can view the full analysis from the report here: SIRI Ratings Report