Updated from 8:27 a.m. EST
The monsters of satellite radio kept bashing it out Thursday morning, with
reporting spiffy subscriber growth leavened by a $162.9 million fourth-quarter loss, and
outlining new marketing alliances with
XM, based in Washington, turned $33.5 million in fourth-quarter revenue into a loss of $162.9 million, or $1.12 a share, reflecting $73.7 million in marketing costs, a $39 million depreciation and amortization expense and other items. The results compared with a loss of $155.9 million, or $1.76 a share, on revenue of $9 million last year.
Analysts had been forecasting a loss of $1.15 a share in the latest quarter on revenue of $33.7 million.
Of vastly more significance to the company's devoted investor class was XM's subscriber tally, which came to 1,360,228 at the end of the quarter and is "now exceeding 1.5 million," presumably meaning on Thursday. The company said it had "record" net subscriber additions of 430,580 during the quarter, up 46% from the end of the third quarter and "more than the total subscriber net additions in 2002."
"Contributing to XM's rapid subscriber growth was a very successful 2003 holiday shopping season, with more than 100,000 subscribers added during the last seven days of December, including over 23,000 on Christmas day," the company noted.
"With over 1.5 million subscribers today, the foundation is in place to grow XM's business to 20 million subscribers by 2010," it added.
The shares, which see daily average volume of 6.5 million and often do three times that amount, were recently off 15 cents, or 0.6%, to $23.30 in Instinet premarket trading.
Meanwhile, Sirius -- a company whose 60 million shares of daily volume make XM look stodgy -- rocketed up 26 cents, or 8.6%, to $3.27 after disclosing the new strategic ventures and predicting it will end 2004 with more than 1 million subscribers.
Beginning in mid-2004, Sirius said, RadioShack will exclusively distribute, sell and market the company's in-home and transportable satellite radios through more than 7,000 retail outlets and over the Internet. As part of the deal, RadioShack will receive warrants to purchase up to 10 million Sirius common shares at an exercise price of $5 -- as long as RadioShack achieves "specified activation targets."
Echostar, meanwhile, will make Sirius music programming available to most of the 9 million subscribers of its Dish Network satellite television service.
All the cooperation leads Sirius to believe it will end the year with a million subscribers, not the 860,000 it previously estimated. In turn, it now sees 2004 revenue exceeding $70 million, rather than only exceeding $60 million, as it predicted not two weeks ago.
"The company continues to expect to reach the cash-flow break-even point of 2 million subscribers by the end of 2005," Sirius noted.