Sirius XM Posts Profit, More Subs
By Joseph Palenchar On May 17 2010 - 3:01am
NEW YORK — Sirius XM Radio in the
first quarter 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 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.
These factors 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” subscription option.
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 Karmazin said.
The first 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 yearend
2009 subscriber base by 1.2 percent
compared with the end of 2008.
For the first quarter, total revenues
were up 13 percent year over year to
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 9.04 million.