Sirius XM Radio Inc. (NASDAQ: SIRI) is scheduled to release its fiscal fourth-quarter 2009 financial results before the market open on Thursday, February 25, 2010. Analysts, on average, expect the company to report a loss of 2 cents a share on revenue of $663.26 million. In the year ago period, the company posted a loss of 8 cents per share on revenue of $622.18 million.Sirius XM Radio Inc. provides satellite radio services in the United States and Canada. The company offers a programming lineup of 117 channels to subscribers, which include 63 channels of commercial-free music and 54 channels of sports, news, talk, entertainment, and traffic and weather.
In the preceding fiscal-third quarter, the company posted a GAAP net loss attributable to shareholders of $149 million or $0.04 per share for the third quarter, compared to a loss of $4.9 billion or $1.93 per share in the prior year quarter. Excluding items, pro forma net loss was $181.9 million or $0.00 per share, compared to a loss of $217 million or $0.05 per share in the year-ago quarter. Third quarter total revenue increased 27% to $618.66 million from $488.44 million in the same quarter last year. Analysts, on average, expected the company to report a loss of $0.02 per share on revenue of $608.71 million for the quarter.
Sirius XM ended the third quarter 2009 with 18.52 million total subscribers, down 2% over last year. Self-pay subscribers were 15.46 million, up 1% from the third quarter 2008. The self-pay monthly customer churn rate improved to 2% from a pro forma 1.7% churn rate a year ago. Total average revenue per user or ARPU for the quarter improved to $10.87 from $10.51 a year earlier.
It appears that the worst is over for satellite radio company. After losing subscribers and money in successive quarters, Sirius seems to have turned the corner. The company has benefited from economic stabilization and a rebound in auto sales. Thanks to that improving backdrop, Sirius XM announced last month that it ended the year with 18,772,758 subscribers, adding 257,028 net new subs in the fourth quarter. The company also said it expect to report over $100 million in free cash flow for all of 2009, compared with a loss of $552 million in 2008. The company said it expects to meet its guidance for the year, with over $400 million in pro forma adjusted operating income, an improvement over more than $500 million from 2008.In a statement, CEO Mel Karmazin said the company’s strong Q4 sub growth reflects improved auto sales, conversion rates and better-than-expected self-pay churn. Those factors, he said, “suggest that the outlook for the auto sector and the effects of the economy on our business are beginning to improve.”
Thanks to economic recovery and federal tax subsidies, US auto sales have picked up in past few months. Sirius XM has installation agreements with all the major automakers. Approximately 55% of the company's total subscriber base comes from the automotive segment, with the remainder coming from consumers buying radios at big retailers such as Best Buy and Wal-Mart.
Sirius XM could also get a boost from Toyota's woes. A shift of car buyers to Ford from Toyota in the wake of the latter’s recent maintenance issues works in SIRI’s favor- the penetration rate for SIRI is over 70% for Ford, versus 40% for Toyota. He also notes that Ford cars ship with 6-12 month pre-paid subscriptions, versus only 3 months for Toyota.
In terms of stock performance, Sirius' shares have gained nearly 769% over the past year. The stock closed above $1 last week for the first time since September 2008 easing worries of stock reverse split and delisting.
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