Sirius XM (SIRI) reported Q2 ’09 earnings essentially in-line with consensus estimates, with a subscriber loss that was not as bad as many expected, though still down from last year.
Sirius’ increase in full-year guidance and less-than-expected sub loss may have accounted for the run up in the shares the past few days. (That could explain, in part, their 11% drop in pre-market trading today.)
As a result of better-than-expected cost control the company increased its guidance for full-year 2009 adjusted income from operations to about $400 million from about $350 million. Here are the highlights, pro forma for the acquisition of XM Satellite Radio:
- Revenue up 1% to $608 million.
- Adjusted operating income from operations of $132 million, up from a loss of $61 million during the prior year’s quarter.
- Net subscriber loss of 186,000 (most were expecting a loss of between 300,000 to 400,000), leaving the company with 18.4 million subscribers at the end of the quarter.
- Subscriber acquisition costs (SAC) decreased 20% to $57.
- Average-revenue-per-user essentially flat at $10.66 versus $10.55 during the prior year’s quarter.
- Average monthly churn (rate at which subscribers drop the service) up to 2.0% from 1.7%.
Over the long-term though investors will likely be looking for more assurance that the company will be able to continue to clean up its balance sheet and some indication that auto sales, a major driver of subscriptions for the company, will at least stabilise from its current slide.
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