New York - Sirius
XM Radio posted a net profit for the second quarter in a row and expanded its
subscriber base for the third quarter in a row, the company said in reporting
attributed its 171,441 net subscriber additions to better-than-expected new car
sales, improving retail sales, and a greater number of new-car buyers
converting promotional subscriptions to paid subscriptions. Also playing a role
were a small but growing number of used-car OEM-radio reactivations and a churn
rate that fell to 2 percent of the subscriber base from a year-ago 2.2 percent.
contributed to a first-quarter net profit of $41.6 million, on a GAAP basis, as
did cost controls, declining borrowing costs and average revenue per user
(ARPU) that grew 10 percent year-over-year, the company said. Rising ARPU, in turn,
was driven in the quarter by the charging of a music royalty fee, rate
increases on the company's multi-subscription and Internet-streaming rate
plans, and 1.1 million subscribers who've stepped up to the company's "Best Of"
For the quarter
ending March 31, Sirius XM expanded its subscriber base by 171,441 people, to
18.9 million. By last week, however, continued net adds boosted subscriber
levels beyond the company's 19 million peak enjoyed at the end of 2008, CEO Mel
quarter's net adds of 171,441 followed a fourth-quarter 2009 gain of 257,028
net adds and a third-quarter 2009 gain of 102,295. The three-quarter trend
reversed a string of net subscriber losses that reduced the company's year-end
2009 subscriber base by 1.2 percent compared with the end of 2008.
also helped the company post a net profit for the second consecutive quarter
following years of losses. The first quarter's $41.6 million net profit
followed a fourth-quarter 2009 net profit of $14.2 million, though previous
losing quarters caused a full-year 2009 net loss of $342.8 million. In 2008,
the company's net loss was $5.3 billion net loss.
For the first
quarter, total revenues were up 13 percent year over year to $663.8 million. The
subscriber base of consumers accessing satellite radio through a vehicle's OEM
sound system grew 14.4 percent to 11.4 million from the year-ago period and was
up 4.2 percent sequentially. Despite what company officials called improving
retail sales, the base of subscribers who own a satellite radio bought at a
retail store continued to shrink, though at a markedly slower pace on a
sequential basis. The retail subscriber base fell to 7.42 million from the
fourth quarter's 7.73 million, which was down markedly from the third quarter's
For fiscal 2010,
the company is holding to its conservative guidance of $2.7 billion in
revenues, up from 2009's $2.53 billion, and net subscriber additions of more
New York - Sirius XM Radio posted a net profit for the second quarter in a row and expanded its subscriber base for the third quarter in a row, the company said in reporting its first-quarter 2010 financial results.