Sirius: Don’t Fret About the Subscriber Shortfall
Good news and bad for Sirius XM Radio today.
The good: The satellite radio company posted one of its strongest third quarters ever, reporting $104 million in net income, or 2 cents a share, on revenue of $763 million — up 6 percent from last year. And that was a penny better than Wall Street predictions.
The bad: Sirius added just 334,000 new subscribers in the third quarter, well below analyst’s expectations of as many as 400,000.
So, a significant shortfall. That said, it doesn’t seem to have caused Sirius to alter its subscriber guidance at all. During the last quarter, it raised it to 1.6 million net adds, and during a conference call Tuesday, CEO Mel Karmazin said that forecast still holds.
“We’ve added 1.16 million new net subscribers so far this year compared to 1.09 million in the first 9 months of 2010, a 6 percent increase over last year,” Karmazin said. “And our second quarter — on our second quarter earnings call, we raised our subscriber guidance for the year to 1.6 million net adds, which we expect to meet. This means, we anticipate adding about 440,000 net subscribers in the fourth quarter, up about 34 percent from subscriber growth in the fourth quarter of 2010.”
In other words, subscribership remains at an all-time high and the growth trend is strong enough that Karmazin feels the company can still hit its target.