Wednesday, June 07, 2006

Another XMSR mention in Forbes (yesterday) by Mary Crane

As noted in posts below, Forbes had a negative twist on Analyst comments yesterday

Market Scan
XM's Run-in With FCC Threatens Q2
Mary Crane, 06.06.06, 8:32 AM ET

Sanford C. Bernstein and Company said risks remained for XM Satellite Radio's second quarter after it suspended shipments of two digital radios, among other products, which violated transmission standards set by the Federal Communications Commission.

In a filing with the Securities and Exchange Commission last week, XM said federal regulators had found its Delphi XM SkyFi II and Audiovox Xpress radio receivers' FM modulators -- used to transmit satellite radio programming over an FM radio frequency -- exceeded FCC limits.
So far, only shipments of the SkyFi II and Audiovox models have been suspended, but Bernstein analyst Craig E. Moffett said third-party retailers like Best Buy or Circuit City could see disruptions to future supplies of FM modulator-equipped units.

Management told analysts at an investor event Monday that it planned to solve the FM modulator issue with a simple, low-cost retro-fit, which would be fitted onto units not already sealed and added outside units already packaged.

"All in all," Moffett wrote in a research note to investors, "the shipping and retro-fit kits suggest the additional possibility of a delay in the supply chain." XM said it hopes the problem will be a "30 to 60 day" issue, Moffett said.

The analyst said the impact of the FM modulator issue on XM's second-quarter results is still uncertain, but will likely raise subscriber acquisition costs and reduce unit volume.
For now, Moffett has maintained an "outperform" rating and $33 price target on shares of XM Satellite Radio .

link to article here

6/07/2006 08:31:00 AM

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