Sirius posts wider loss; raises guidance | VailDaily.com
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Sirius posts wider loss; raises guidance

NEW YORK – Sirius Satellite Radio Inc. posted a wider loss in the third quarter Tuesday but edged up its estimates for full-year subscriber growth and said it anticipates a “blowout” fourth quarter as it rolls out new products and gears up for the January arrival of shock jock Howard Stern.Sirius, the smaller of the nation’s two satellite radio companies, said its net loss widened to $180.5 million, or 14 cents per share, from $169.4 million, also 14 cents per share, the year before. Analysts polled by Thomson Financial were looking for a loss of 16 cents per share.Revenue more than tripled to $66.8 million from $19.1 million a year earlier, ahead of analysts’ target of $64.7 million.Sirius added 359,294 net subscribers in the quarter, almost twice the amount from the prior-year period, raising its total customer base to about 2.2 million. Sirius said it now expects to end the year with “over” 3 million subscribers, versus its previous estimate of an even 3 million.Last week Sirius’ competitor XM Satellite Radio Holdings Inc. said it doubled its customer base to 5 million from 2.5 million a year ago, and still expects to end the year with more than 6 million subscribers.Sirius’ shares rose 29 cents, or 4.7 percent, to close at $6.52 in active trading Tuesday on the Nasdaq Stock Market. The stock is still down about 15 percent so far this year, however, following a sharp runup in value last year.Sirius and XM have both accumulated massive losses as they pour resources into programming, new products, marketing and signing up new subscribers in what is still a rapidly growing business.Both services cost about $13 a month and offer more than 100 channels of talk radio and commercial-free music that can be heard on special radio receivers that can get signals throughout the country.Sirius CEO Mel Karmazin, a former top executive at Viacom Inc., told analysts on a conference call that he expected a “blowout” fourth quarter as Sirius introduces several new products this fall and cranks up a major advertising effort ahead of Stern’s arrival in early January.The company did not disclose how much it expected marketing costs to increase because of the Stern advertising campaign, but David Frear, the chief financial officer, said on the call that costs for marketing as well as acquiring subscribers would “increase substantially” in the fourth quarter.Sirius is making an enormous bet on Stern, having signed a $500 million, five-year contract with him. It has yet to be seen whether that or other major gambles on programming contracts from Sirius and XM will pay off. Other big-ticket deals include an 11-year, $650 million package XM signed with Major League Baseball.Sirius said its churn rate, or the ratio of departing subscribers to current ones, edged up to 1.8 percent in the quarter from 1.5 percent a year ago, but the company said it still expects average monthly churn to be about 1.5 percent for the whole year.Costs for adding subscribers fell to $149 per subscriber from $229 a year ago. The company said it expects the figure to come in at $145 for the year.—On the Net:http://www.sirius.com


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