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Sirius Revenue Triples, Net Loss Widens

11/01/2005 10:29:00 AM Eastern

New York — Sirius Satellite Radio’s third-quarter revenue more than tripled, rising 250 percent to $66.8 million from a year-ago $19.1 million.

Although the company reported about the same operating loss quarter over quarter — $166.9 million in this year’s third three months vs. $167.2 million in the same period last year — net loss for the quarter widened to $180.5 million, compared with $169.4 million in last year’s third quarter.

The company said “strong third-quarter financial and operating results” were driven by subscriber growth in its retail and OEM distribution channels and “continued demand for its superior programming.”

After the third quarter, ended Sept. 30, Sirius totaled 2.2 million subscribers, which includes 359,294 net additions, a 97 percent increase over the year-ago figure of 181.948 net subscriber additions. Subscriber total at the end of September 2004 was 662,289. Retail subscribers climbed to 1.6 million in the current three months, up from 534,871 year-on-year.

Driven by traditionally strong consumer demand in the fourth quarter, Sirius said it expects to have 3 million subscribers on board by the end of 2005.

Sirius reported subscriber acquisition costs per gross subscriber reached $149 in the third quarter, a 35 percent improvement over the $229 recorded in the same three months in 2004.

Average monthly churn for the third quarter was 1.8 percent, compared with 1.5 percent a year earlier. Year-to-date churn was 1.5 percent.

Average monthly revenue per subscriber hit $10.89 in the third quarter, up from $10.69 in the same three months the prior year.

During the third quarter, the company added 209,920 net subscribers from its retail channel, a 56 percent increase over the 134,442 retail net subscriber additions in the same period a year ago. The company also added 149,000 net subscribers from its automotive OEM channel, a 230 percent increase over the 45,196 net subscriber additions from that channel in the same three months last year.

“We continued to gain retail and overall market share in the quarter,” said Mel Karmazin, CEO, “while meeting our guidance for third-quarter net subscriber additions.”

For the nine months, Sirius reported revenue of $162.2 million, up from a year-earlier $41.6 million. The revenue rise was driven by a net increase of 1.5 million subscribers in the year, from last Sept. 30 to date.

Loss from operations moved up to $531.8 million in the nine months, compared with a negative $419.7 million in the same period last year. The increase was driven by an 88 percent rise in subscriber acquisition costs, which reflected higher shipments of Sirius radios and chip sets and increased commissions to support a 169 percent rise in gross subscriber additions, to 1.3 million, from a year-over-year 465,077. Net loss for the nine months widened to $551.6 million from a year-ago loss of $450.3 million.

For the nine months, average subscriber acquisition costs per gross subscriber addition hit $164, down from a year-earlier $235. Average churn for the period was 1.5 percent, compared with 1.7 percent in the first nine months of 2004.

Average monthly subscriber revenue per subscriber increased to $10.58 in the first nine months, compared with a year-on-year $10.44.

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