shares rode higher Monday as a struggling automaker became the latest to board the satellite radio bandwagon.
The New York pay-radio broadcaster says Japan's Mitsubishi will offer factory-installed Sirius radios on its new midsize Raider truck later this year, and on three other vehicle models for 2007.
News of the exclusive deal bumped Sirius shares up 18 cents, or 3%, to $5.84 in midday trading Monday. Meanwhile, radio rival
saw a 12-cent gain to $33.23.
The two-player satellite radio sector has attracted growth-hungry investors who have been able to see beyond the massive cash-burning stage of development to a future sky's-the-limit mass-market opportunity. Automakers have helped push the broader appeal by putting satellite radios in new cars with free trial subscriptions.
The deal comes as Mitsubishi, the heavily indebted and unprofitable carmaker, seeks to shore up its own financial standing. The company last month secured some much-needed aid from its Mitsubishi Tokyo Financial affiliate. That preferred-stock deal came less than a year after Germany's
declined to infuse more cash into the company, whose market share in the U.S. has been in sharp decline.
Sirius and XM have nearly split the carmakers down the middle, with each of the major players aligning with one or the other broadcaster. Last week, Sirius added Volvo to its list, with the automaker planning to offer dealer-installed radios on four models this year.
Though the competition is heated, that hasn't translated to consumer price cuts. In fact, last week, XM raised its monthly subscription price 30% to $12.95, matching Sirius' current offer.
Some analysts applauded the move as a sign that the companies are looking to push revenue growth and pull out of the cash-consuming rut.
"The additional revenue gives us substantially greater comfort in XM's ability to reach operating cash flow breakeven during 2006, and we now believe EBITDA breakeven is achievable in 2007, a year ahead of our previous expectation," Fulcrum Global Partners analyst Peter Friedland wrote in a research note.
And with the addition of CEO Mel Karmazin, Sirius has been looking to beef up its advertising sales -- especially on its sports channels and in anticipation of Howard Stern's show next year.
"Advertising will be a very important revenue contributor in the years ahead," Karmazin said in January.