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Sirius XM

(SIRI) - Get Sirius XM Holdings, Inc. Report

surprised analysts by breaking even on an adjusted basis in the third quarter, as the company added radio subscribers on a sequential basis.

Sirius XM said it had a net loss of $149.2 million, or 4 cents a share, for the quarter ended Sept. 30, shrinking considerably from a year-ago loss of $4.87 billion, or $1.93 a share. Excluding one-time items, the satellite radio provider broke even on a per-share basis.

Revenue rose 3% from a year ago to $630 million, even as Sirius XM's net subscriber total fell 2% from a year ago to 18.5 million. On the positive side, total subscribers increased by 102,295 from the second quarter.

Analysts expected a loss of two cents a share on revenue of $608.7 million, according to a poll by Thomson Reuters.

Some key metrics for Sirius XM improved from the year ago quarter. Average revenue per subscriber climbed to $10.87 from $10.51, and subscriber acquisition costs fell by 17%. However, the churn rate, which measures the amount of subscribers who left the service, rose to 2% from 1.7% in the year-ago quarter.

Meanwhile, costs related to satellite and transmissions, programming and content, customer service and billing, sales and marketing and equipment decreased across the board.

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Looking ahead, Sirius XM affirmed its year 2009 guidance of over $400 million in pro forma full-year adjusted income from operations. It also introduced guidance for 2010, projecting a 20% increase in full-year adjusted income from operations as well as positive full-year subscriber growth in 2010.

During an interview on


, Sirius XM CEO Mel Karmazin addressed questions about a reverse stock split. Shares have closed under $1 since Sept. 2008, and Sirius XM has until March 15 to meet the Nasdaq's listing standard.

Karmazin said that Sirius XM is"one of the most valuable companies on the Nasdaq today," and that it is working with the Nasdaq regarding the minimum bid standard.

"We'd like them to change the rules for us," Karmazin said. "We have a very, very substantial market cap."

In a word, Karmazin said concerns over the company's debtload are "over." During the quarter, Sirius XM sold $257 million of new 9.75% senior notes due 2015 in order to repay $250 million of 15% term loans that would have matured in 2011 and 2012.

Shares of Sirius XM were lately up 2 cents, or 4.4%, to 63 cents.

-- Written by Robert Holmes in New York


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