XM (XMSR) dropped 5% late Friday after saying component troubles slowed growth in the third quarter.
The pay radio shop said it reached 2.5 million subscribers in the third quarter ended Thursday and says it expects to exceed its target of 3.1 million users by year-end.
The Washington, D.C., satellite radio broadcaster added 415,000 net new subscribers in the quarter, roughly equal to the 418,000 it added in the prior period. XM says the additions would have been higher, but some radio production was stopped while the company fixed component problems.
"The second half of the year is shaping up very well, with third-quarter subscriber gain reflecting consistent progress towards exceeding our 2004 year-end guidance of 3.1 million subscribers," XM CEO Hugh Panero said in a press release after the market closed Friday.
In August, the company raised its 2004 subscriber target to 3.1 million from 2.8 million. The company now says it will exceed the 3.1 million mark.
Satellite radio rival
held a new product show for investors in New York on Wednesday, helping to
boost the stock on top of an analyst upgrade earlier in the day.
Late Friday, XM fell $1.56 to $29.30.