Sirius XM Radio Inc (SIRI) nabbed its first quarterly profit since its 2008 merge.
The company expects to sign 500,000 new subscribers to the service in 2010. Revenue was up 6% to $684 million, beating the analysts’ forecast of $664 million.
With a subscriber boost and cost cutting, the company reported a 4Q net income of $14.2 million, or nil per share, compared with a 2008 net loss of $245.8 million, or 8 cents a share.
Thomson Reuters analysts forecast a loss of 2 cents a share.
“Bringing Howard to Sirius was a great call!” said CEO Mel Karmazin on the earnings call. But executives gave few details on renewing his contract, saying that Sirius listeners should tune in to Howard’s show for updates. Howard’s contract, which is reportedly up in January 2011, does not specify when the company needs to start renegotiating with them. So “when we have something to announce, we will announce it,” according to Sirius.
Ad revenue was flat compared to 2008. The company is cautiously optimistic about signing on more brands for 2010. But executives were sure to point out that Sirius generates $70 per listener per year, compared to terrestrial radio at $10 to $20 per listener per year.
They also see potential in wrangling in more traditional radio listeners. There are 25 million radios out there, and approximately 11 million active, according to Sirius. This provides many opportunities to reach out, beyond just listeners in cars and trucks.
The bottom line, according to Karmazin: Sirius XM is positioned to have the agility and flexibility they need to grow the bottom line.
“2009 was a notable year of firsts for SIRIUS XM: The first full year of positive pro forma adjusted income from operations and the first full year of positive free cash flow in the company’s history,” Karmazin said in the earnings statement. “We demonstrated considerable operating momentum in the fourth quarter – the addition of over 250,000 subscribers, ARPU growth, revenue growth, improved SAC, and continued operating cost reductions. These gains position us to deliver on our 2010 guidance.”
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