New York – Sirius Satellite Radio reported a 150 percent increase in revenue for the third quarter and reduced loss due to a 3 million increase in new subscribers during the past year.
Sirius said that revenue for the quarter hit $167.1 million due to the subscribe increase. The company also reported a 23 percent improvement in cost per gross subscriber addition from the year-ago quarter.
Sirius reported a net loss of $162.9 million for the third quarter compared with a net loss of $180.4 million for the same period last year. The company had an adjusted third quarter loss from operations that was down $22.2 million, or 21 percent year-over-year, to $83.2 million vs. $105.4 million for the same period last year.
The satellite radio company ended the third quarter with 5.12 million subscribers, 135 percent above third quarter 2005’s 2.17 million. During this period Sirius added 441,101 net subscribers, a 23 percent increase over last year’s third quarter that had net subscriber additions of 359,294.
For the fourth consecutive quarter, Sirius claimed it led the satellite radio industry in net subscriber additions, capturing a record 61 percent of total satellite radio net additions in the third quarter. Sirius added about 205,900 net subscribers from its retail channel and about 236,500 net subscribers from its automotive OEM channel during third quarter.
“Sirius continues to focus on excellence in programming and solid execution of our business plan,” said Mel Karmazin, CEO. “Over the last year, we generated $100 million in new revenue, increased our share of satellite radio net subscriber additions by 24 percentage points and reduced our [subscriber cost] per gross addition by 23 percent. We are well prepared to meet fourth quarter demand and remain focused on achieving positive free cash flow.”
Average monthly revenue per subscriber (ARPU) was $11.17 in the third quarter compared with $11.15 in the year-ago third quarter. ARPU for the third quarter of 2006 included a 49 cent contribution from net advertising revenue compared with a 26 cent contribution from net advertising revenue in the year- ago third quarter.
Average monthly churn was 2 percent in the third quarter vs. 1.8 percent in the year-ago period reflecting the impact of a 177 percent larger OEM subscriber base year-over-year.
On a conference call this morning, CEO Mel Karmazin said that by next year in traditional radio, only ClearChannel and CBS Radio will generate more revenue than Sirius.
Karmazin said Sirius’ retail share for net new subscriber additions for the third quarter was 75 percent. Looking at market share figures from NPD (whose data excludes Wal-Mart and warehouse clubs), Sirius’ retail market share was 57 percent in September 2006, 57 percent for the quarter and 58 percent year to date, he said.
Sirius acknowledged “softness” in the last two months in retail sales of some consumer electronics products and in satellite radio overall, but said it expects a strong fourth quarter at retail. The company promised good supplies of its radios including the new wearable Stilletto. It said it also expects a lift from NASCAR fans as Sirius’ five year deal to carry NASCAR programming begins in January.
Sirius has begun taking delivery of it fourth generation chipset that will be included in products starting in the first quarter next year and which is expected to significantly reduce power requirements and product costs, it said.
The company also reported that it booked $22.7 million in advertising for the quarter compared to only $3.1 million for the quarter in 2005 and said that Panasonic and LG are among its corporate advertisers.
Finally Sirius said the two day free trial in October of its newly launched Sirius Internet Radio (SIR) resulted in more than 200 percent more traffic than Sirius Internet listeners on the same day last year. The new SIR provides CD-quality Internet reception of 75 Sirius channels at $12.95.
Total brand awareness for Sirius is now at 74 percent and unaided brand awareness is 54 percent, it said. Sirius also announced that Mercedes Benz is now installing Sirius radio in over two thirds of its 2007 vehicles.