XM Satellite Radio (XMSR) sent Wall Street the strong growth signal it was hoping for.

The Washington, D.C.-based pay-radio shop posted better-than-expected first-quarter results Thursday and stuck with projections calling for it to double its subscriber rolls by year-end.

Overcoming an early selloff, XM shares were up 7 cents to $11.06 at lunchtime.

XM and its satellite radio rival Sirius ( SIRI) have attracted investor attention as among the few growth plays in tech, building on the early success of the still-cultish premium radio service. At XM, key partnerships with automakers GM ( GM), Toyota ( TM) and Honda ( HMC), as well as major distribution arrangements with big retail chains including Wal-Mart ( WMT), have helped fuel the bullish argument for the stock.

The company says it will boost its paid user count this year from 500,000 now to a total of 1.2 million. XM executives on an earnings call Thursday also repeated their pledge to reach break-even by the end of 2004.

As nice as their growth plans might sound, XM and Sirius are still plagued by the same financial worries that have laid low so many tech growth darlings. Both companies continue to post massive losses while carrying heavy debt loads.

Even given its solid improvement in recent periods, XM's income statement remains a frightful sight. The company posted a first-quarter net loss of $126 million, or $1.27 a share, on sales of $13 million. Of course, on a comparative basis that's not bad: During the previous quarter XM lost $1.63 per share on $9 million in revenues, and a year ago it lost $1.56 per share on not quite $2 million in sales.

Executives told analysts on the call that the company has made progress on the debt front. Through stock swaps and debt buybacks, XM says it has eliminated $212 million in debt-related costs. The company burned through less than $3 million in cash in the first quarter, leaving it with $72.6 million on hand.

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