Satellite Radio News (5.10.04)

The following is a summary of today's satellite radio headlines:

XM Curdles as Churn Comes to Light (TheStreet.com, 5.6.04) Investment article notes that investors are suddenly picking up some troubling signals from XM Satellite Radio. The Washington, D.C., pay radio broadcaster and 2003 market favorite posted seemingly solid first-quarter financial figures Thursday, including a threefold year-over-year sales increase. But Wall Street's enthusiasm was tempered by disclosure of a stealthy and unhealthy subscriber-departure trend. At first glance, subscriber losses seem like a nonissue at XM. After all, the company reported Thursday that, on average, a mere 1.35% of its subscribers canceled service each month in the first quarter. But like the pro forma profit calculations of yesteryear, this so-called churn number can be a slippery critter. The number is calculated at the company's discretion and, as critics point out, can include whatever numbers executives choose. This latest wrinkle was exposed on a conference call with analysts Thursday. XM executives, responding to a question, revealed for the first time in memory a gross subscriber-addition figure. That's a figure the company hasn't routinely disclosed, preferring instead to focus on the ever-rising net figure. (Read more)

XM Slips Despite Solid Numbers (TheStreet.com, 5.6.04) News article notes that XM Satellite Radio hit its quarterly targets Thursday, but its shares slipped 6% as growth-hungry investors weren't satisfied. The Washington, D.C., pay-radio shop added 321,675 net new subscribers in the first-quarter ended in March. That figure is in line with the upward revisions XM made to its guidance last month. XM's latest-quarter loss ballooned to $170 million, due in part to a $25 million tax deferral adjustment. On an adjusted per-share basis, XM had a net loss of 82 cents on sales of $43 million. That compares to an 89-cent loss on $80 million in sales for the December quarter, and a $1.36-a-share loss on $13 million in sales during the year-ago period. The results were in line with Wall Street expectations, according to a Reuters Research tally. At the end of March, XM had $435 million in cash and available credit. Its long-term debt obligation is $693 million. (Read more)

XM Satellite quarterly loss widens (Reuters, 5.6.04) Investment article notes XM Satellite Radio said its first-quarter net loss widened, but revenue tripled as its subscriber base grew. Washington-based XM said its net loss attributable to common shareholders widened to $172.4 million, or 96 cents a share, from a loss of $124 million, or $1.26 a share, a year earlier. The latest figure includes higher costs related to subscriber growth and a noncash deferred tax charge of $25.6 million, XM said. Revenue in the quarter jumped to $43 million from $13.1 million. The company added 321,675 net subscribers to end with 1.68 million subscribers. (Read more)

Is Sirius closing the gap with XM? (CBS MarketWatch, 5.3.04) Investment article notes that Sirius Satellite Radio issued a press release Friday that said market research firm NPD had pegged its market share at 44 percent. That's up 41 percent from February, suggesting that it's nipping at the heels of rival XM Satellite Radio. The news caused Sirius's stock to lift 5 percent on heavy volume. In the end, all that matters is actual subscribers, where XM still commands a healthy lead with a 71 percent share versus around 29 percent for Sirius. (Read more)