Sirius XM Reports Loss, Ups Guidance

Sirius XM reported a second-quarter loss that met Wall Street's expectations, even as it lost subscribers, and the company upped its full-year view.
Publish date:

(Updated with final share price movement.)



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Sirius XM

(SIRI) - Get Report

said it saw a third straight quarter of positive adjusted income despite another decline in subscribers, and the company upped its full-year guidance.

Investors in Sirius XM were less than thrilled, though, as shares finished lower by 1.7%, or a fraction of a penny, at 53 cents.

The satellite radio provider reported a net loss of $157.3 million, or 4 cents in the share, swelling from the year-ago loss of $83.9 million, or 6 cents a share. Excluding one-time charges, Sirius XM said it would have lost a penny a share, matching the Thomson Reuters consensus of analysts.

In the recent quarter, Sirius XM said it achieved positive pro forma adjusted income from operations of $132 million, swinging from a pro forma loss of $61 million in the year-ago quarter.

Part of Sirius XM's success in the quarter, one marred by a swooning auto market, was attributable to its subscribers spending more. Pro forma total revenue, which takes into account the merger of Sirius and XM a year ago, rose 1% to $608 million, even as the total number of subscribers dropped 1% from a year ago to 18.41 million.

At the same time, the monthly revenue per subscriber was $10.66 in the second quarter, rising from $10.55 in the year-ago period. Subscriber acquisition costs per gross subscriber improved 20% from a year ago to $57.

While Sirius said it saw a net loss of about 186,000 subscribers in the quarter, it actually saw an increase of 123,165 subscribers through the automotive channel. On the other hand, retail and rental subscribers dropped by 309,164 combined.

The second-quarter net subscriber loss also improved from the first quarter, when Sirius XM saw a net subscriber loss of 404,422, the first subscriber loss in the company's history.

The company also benefitted from a 28% decrease in total cash operating expenses since the merger of Sirius and XM one year ago. Since that time, the stock has dropped more than 60%, although Sirius XM shares have surged more than 350% in 2009.

Sirius XM also increased its full-year 2009 guidance for adjusted income from operations to over $400 million from over $350 million. In May, Sirius had said it expected to achieve over $350 million in full-year adjusted income for 2009, up from the previous guidance of over $300 million it provided in March.

"Based on these results we are increasing guidance again and expect to exceed over $400 million in adjusted income from operations during 2009," CEO Mel Karmazin said in the release. "Growing our revenue in the face of broad declines in the advertising and automotive markets is a remarkable accomplishment, and we are well positioned for a rebound in auto sales."

During the company's conference call, Karmazin said that the U.S. government's Cash-for-Clunkers program is working, and production schedules are resuming. He added that he is "cautiously optimistic" for the second half of the year and 2010.

Earlier this year, Sirius XM received $530 million in financing from

Liberty Media

as concerns over debt mounted.