XM's Q1 Better,Says Its UpbeatOn Sirius Merger
By Amy Gilroy and Steve Smith -- TWICE, 5/7/2007
WASHINGTON — XM Satellite Radio reported stronger sales and a reduced loss for the first quarter and said it was upbeat about its proposed merger with Sirius.
XM reported a 27 percent gain in sales and a reduced loss for the first quarter, ended March 31. XM had Q1 sales of $264 million compared with $208 million in the 2006's opening quarter, and its net loss for this year was $122 million, an 18 percent improvement compared with the previous year's net loss of $149 million.
The company reported it ended the quarter with more than 7.9 million subscribers compared with 6.5 million subscribers in the prior year period and XM said it recently surpassed 8 million subscribers.
For the first quarter of 2007, adjusted operating loss (formerly adjusted EBITDA) improved by 45 percent to a loss of $27 million, from a loss of $49 million in the prior year period. The 2007 first quarter adjusted operating loss includes $8 million in expenses related to the company's pending merger with Sirius Satellite Radio.
In the 2007 first quarter, XM recorded gross subscriber additions of 868,000 and net subscriber additions of 285,000, which compare with 1 million gross additions and 569,000 net subscriber additions in the 2006 first quarter.
Upon the release of the Q1 results XM CEO Hugh Panero told analysts during a conference call late last month, "We continue to believe we will ultimately receive the necessary approval to continue with the merger."
That comment was despite reports stating that some analysts now better than a 50 percent chance of receiving federal approval.
Panero said that a merger application was filed with the FCC on March 20 and that the agency is expected to open up public comment on the merger shortly.
XM spent $8 million on such merger expenses as hiring lobbyists during the first quarter, it reported.
The company claimed that total satellite radio retail sales remain soft because of "competition from a range of entertainment products." XM's retail after-market gross subscriber additions for the quarter totaled 330,892 compared with 516,416 for the period last year.
XM said it will release two new plug-and-play products by mid-summer.
