NEW YORK ( TheStreet) -- Sirius XM ( SIRI - Get Report) has swung to a fourth quarter profit and expects full-year 2010 revenue roughly in line with expectations amid projections of subscriber increases.

Sirius stock fell 3.6% to $1.10 in late morning trading.

Sirius XM is projecting full-year revenue of more than $2.7 billion, compared with analysts' expectations of $2.79 billion. Sirius XM expects it will add over 500,000 net subscribers in 2010.

The company also expects cash flow to remain positive in 2010.

"I don't think you can debate anymore whether this is a real company, a multibillion dollar marketcap company," Wunderlich Securities analyst Matthew Harrigan says. But whether the stock will continue its momentum remains debatable.

Harrigan thinks Sirius XM stock will have trouble going through $1.25 or $1.30, but still sees "a little" upside to the stock.

Several key metrics performed favorably for Sirius XM during the fourth quarter.

Sirius XM achieved net income of about $14.2 million compared with a loss of $245.8 million the previous year. Earnings per share was nil compared with an 8 cent loss the previous year -- better than the 2 cent loss analysts had expected.

Free cash flow in the quarter was $150 million compared to $26 million in the fourth quarter of 2008.

Sirius XM achieved fourth quarter, pro forma revenue of $684 million, up 6%, beating the $663.26 million Street consensus. Revenue was helped by the U.S. Music Royalty Fee introduced in the third quarter of 2009, the sale of "best of" programming, and rate increases to the company's multi-subscription and Internet packages.

Meanwhile, Sirius XM's ARPU (average revenue per user) grew to $10.92 from $10.65 in the quarter. Average self-pay monthly customer churn rate was 2%, compared with 1.8% the year before.

Furthermore, the company saw an improvement in costs to acquire new subscribers. Its SAC (subscriber acquisition costs) per gross addition was $64 in the quarter, an improvement of 9%, helped by lower OEM (original equipment manufacturer) subsidies, chipset costs and aftermarket acquisition costs.

Sirius XM lost about 230,000 customers year-over-year in 2009, according to Harrigan, meaning much of the company's fourth quarter revenue was driven by pricing, and not subscriber growth.

The coming year however will be subscriber-growth driven given the "appeal of the product" -- as Harrigan points out -- and improving trends in autosales. Meanwhile, the retail side of the company's business has been made more appealing with Blackberry and iPhone applications, but they remain peripheral to the business compared with autosales, Harrigan says.

-- Reported by Andrea Tse in New York

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