Sirius Posts Lower Losses
By Amy Gilroy -- TWICE, 8/6/2009
New York - Sirius XM Radio reported a lower net loss and slightly improved revenue; however, it continued to lose retail subscribers.
Due in part to synergies resulting from the Sirius-XM merger a year ago, the company continued to lower operating expenses and raised its guidance for the full year 2009 to an adjusted income from operations of more than $400 million, up from more than $350 million.
For the quarter, ended June 30, Sirius XM reported a net loss of $171.3 million, compared with a net loss of $203.5 million for the same period a year ago on a pro forma basis. Revenue was up 1 percent to $608 million, compared with $601 million a year ago.
Subscribers fell to 18,413,435, a decrease of 1 percent from the second-quarter 2008 pro forma total subscribers of 18,576,830. This marked a net subscriber loss of 185,999 from the first quarter; however, Sirius claimed most of that loss came from non-paid subscribers on a trial period, as a result of slower auto sales.
The retail sector, however, saw a decline of 301,295 net new subscribers, while the OEM segment gained 123,165 net new subscribers.
Self-pay subscribers (who are not on a free trial) were 15,421,414 in second quarter 2009, virtually unchanged from self-pay subscribers in the first quarter of 15,436,410, and up 4 percent from the 14,829,150 self-pay subscribers in the second quarter 2008. Promotional subscribers were 2,992,021 in second quarter 2009.
Sirius also reported $132 million in adjusted income from operations, marking its third consecutive quarter of positive adjusted income, and it announced a 28 percent decrease in total cash operating expenses since the merger of Sirius and XM one year ago.
"Just one year ago, combined operations produced negative adjusted income from operations of $61 million," said Sirius XM CEO Mel Karmazin. "This year our revenue increase in the second quarter, paired with a $187 million expense reduction, drove an improvement of approximately $193 million in adjusted income from operations to $132 million in second quarter 2009. Based on these results we are increasing guidance again and expect to exceed over $400 million in adjusted income from operations during 2009. Growing our revenue in the face of broad declines in the advertising and automotive markets is a remarkable accomplishment, and we are well positioned for a rebound in auto sales."
Second quarter subscription revenue was $577 million, up 3 percent from $588 million a year ago. Subscriber acquisition cost (SAC) per gross subscriber addition was $57 in the second quarter 2009, an improvement of 20 percent over the $71 in pro forma SAC per gross subscriber a year ago.
Monthly average revenue per subscriber (ARPU) was $10.66, up from $10.55 last year, and pro forma self-pay monthly customer churn rate rose to 2 percent, up from 1.7 percent a year ago but down from 2.2 percent in the first quarter.
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