WASHINGTON — Citing better than expected subscriber growth, XM Satellite Radio upgraded its year-end subscriber projections to 3.1 million, up from 2.8 million.
Burgeoning retail and new car market sales allowed satellite radio service provider XM to more than double net subscriber additions in the second quarter and to nearly triple revenue in the same three-month period.
Net subscriber additions for the quarter, ended June 30, reached 418,449, compared with 209,178 in the year-ago period. As of the end of the second three months, XM reported a total of 2.1 million subscribers, compared with a year-ago 692,253.
Revenue in the second quarter hit $53 million, up from the $18.3 million reported in the same period in 2003. Second quarter revenue also climbed 23 percent over the $43 million recorded in the first quarter of this year.
"We are thrilled by our subscriber growth in both the new car and retail markets during the first half of this year," said Hugh Panero, president/CEO.
XM said that revenue from the OEM sector now accounts for 50 percent of its sales.In 2005, XM will be available in 100 car models, and in 75 models as a factory installation. General Motors is expected to produce its 2 millionth XM-equipped vehicle in the near future, Panero said.
In the retail sector, XM said it has a subscriber market share of 81 percent.
XM also announced that it reached a settlement last month with insurers covering 80 percent of the sum insured for its Boeing 702 satellites (a model which was found to have a general defect that could shorten the life of the satellite). XM said it has settled for $142 million and is taking action to retrieve the remaining 20 percent.
Continuing its second quarter earnings report, XM said negative earnings before interest, taxes, depreciation and amortization (EBITDA) in the second three months, widened to $107.8 million, compared with an EBITDA loss of $95.8 million year-on-year. These EBITDA figures include de-leveraging charges in the second quarters of 2004 and 2003, of $35 million and $19.4 million, respectively.
XM's net loss widened somewhat in the second quarter, coming in at $166.1 million, compared with a loss of $161.9 million in the second three months a year earlier.
XM said costs per gross addition to acquire each new subscriber had been reduced to $101 in the second quarter, a 37 percent decline from the $160 registered in the year-ago three months.
Total revenue per subscriber for the second three months, however, dropped to $9.40, down from $10.60 year-over-year.
As part of several new programming announcements this month, XM said it would offer a paid premium channel, which will feature talk radio personalities Opie and Anthony.