NASCAR, The Movie!
NASCAR On Film Racing Circuit Uses Movies To Make New FansJuly 30, 2006, By SUSAN DUNNE, Courant Staff Writer NASCAR wants you to be a car-racing fan. Its executives want everybody in the country to be car-racing fans. And they've got a dedicated staff working very hard to try to make it happen.For about six years, the National Association for Stock Car Auto Racing Inc. has operated an office in Hollywood, the heart of the entertainment industry, to find ways to entice non-fans into fandom...( MORE) 7/31/2006 10:43:00 PM
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What Cramer Said Tonight On Mad Money
Satellites of Like
Unlike Amazon, there are stocks that do get cheaper as they go down, Cramer said. However, there are few analysts that understand which ones are good and which ones are not. There are analysts that will keep telling people to buy stocks as they sink and to sell when they have bottomed. A perfect example of this is AT&T (T) , he said. Analysts loved this stock when it was in its $30s, $20s and in the teens, whereas Cramer said he despised it. However, when the stock got down to $6, all the analysts turned on it. They decided to hate it after it had plummeted, he said. Meanwhile, AT&T was becoming more valuable compared with all the other companies in its sector as it went down. AT&T was the perfect takeover target at $6, Cramer said. Right now, in real time, the same thing is happening to XM Satellite Radio (XMSR) . Cramer said he hated it while it was in the $30s, $20s and teens, but now it's at $11.60, and he believes that it's not just a buy, but a triple buy. He said he knows for a fact that the stock has bottomed because CIBC analyst Jason Helfstein, who was telling people to buy XM Radio in its $30s, $20s and teens, has cut and run from the stock, at which point anybody who was in the stock on the advice of CIBC sold it. When an analyst who has been consistently wrong about a stock changes his or her mind about it, you should change your mind about it too and do the opposite of what the analyst thinks you should do, Cramer said. At $11.60, XM Radio is now a $3 billion company and is the perfect takeover target, just like AT&T was, he said. XM Radio has some problems with the Federal Trade Commission, but it is a short-term issue, he said. It would cost Sirius Satellite (SIRI) $4 billion to buy XM Radio because the company has $1 billion in debt. But Cramer believes that buying XM Radio would be good for the company because Sirius could have a monopoly in the sector. "Right now there is genuine competition, and it's hurting both companies," he said, adding that the iPod is not a threat, and the companies offer more than just music. The only thing hurting the companies now is competition, he said, adding that he believes XM Radio has hit bottom and could be bought by Sirius here -- and make you some mad money. Link to article: HERE7/31/2006 10:35:00 PM
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Forbes Commentary On Upcoming Sirius Earnings
MediaSirius Preps For Red InkLouis Hau, 07.31.06, 6:30 PM ET ( www.forbes.com) Sirius Satellite Radio has the most famous name in radio, a chief executive who makes headlines whenever he speaks and an ever-increasing customer base. But the combined powers of Howard Stern, Mel Karmazin and 4.7 million subscribers still haven't been enough to defeat Wall Street skeptics, who are increasingly wondering when Sirius and rival XM Satellite will ever make money... Link to full article: HERE7/31/2006 10:25:00 PM
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Sirius Earnings Release And Conference Call Tomorrow
Sirius will release earnings tomorrow morning before the open. The conference call will take place at 8:00 AM. Link to webcast: HERE7/31/2006 04:15:00 PM
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What Cramer Said Today on RealMoney Radio
Cramer said he believes that Sirius Satellite ( SIRI - commentary - Cramer's Take) is a situation where CEO Mel Karmazin seems to have it under control and that Karmazin will take the stock up tomorrow. He said Sirius could go up to $5 over the next few days if Karmazin tells a good story, which Cramer believes he will. Sirius was recently trading at $4.36. Link to article: HERE7/31/2006 04:13:00 PM
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Sirius Earnings Preview By Associated Press
July 31, 2006, 2:33PM Earnings Preview: Sirius Satellite Radio© 2006 The Associated Press NEW YORK — Sirius Satellite Radio Inc. reports second-quarter earnings Tuesday. The following is a summary of key developments and analyst opinion related to the period. OVERVIEW: With 4.7 million subscribers at the end of June, New York-based Sirius is the second-largest operator in the burgeoning satellite radio sector, trailing XM Satellite Radio Holdings Inc.'s 6.9 million. The company, which generates revenue from flat-rate monthly subscription charges, closed the gap on XM in the second quarter, growing at nearly twice the rate of its larger competitor. Sirius added 600,460 subscribers _ beating analyst expectations for 555,000 _ while XM added a net 398,000. The results come after Sirius, in May, backed projections for more than 6.2 million subscribers by the end of 2006, which would be an increase of 87 percent from 2005. Analysts expect a sharp increase in revenue thanks to the subscriber growth, but they will also be watching to see how much money the company spent to get each new listener, which are costs that have kept Sirius in the red. Much of the company's recent success has been credited to shock jock Howard Stern, who left free radio to join Sirius in January. The company also gets a boost from deals with carmakers to have its radios installed as a standard or optional feature. In April, Sirius signed a deal with Korean carmaker Kia, adding to its pacts with Volkswagen, BMW, Ford and Daimler Chrysler. XM has inked contracts with General Motors, Honda, Toyota, Hyundai and Nissan. Both companies, however, have run into regulatory problems with some radio models designed to operate with standard FM car radios. XM stopped making and shipping certain models, but Sirius said it has taken steps to correct any issues, and that units currently under production comply with Federal Communication Commission standards. However, the company also said it found in an internal review that some of its staff had asked manufacturers to make radio units that didn't comply with FCC rules. In programming news, Sirius signed up Mark Cuban, the founder of Broadcast.com and owner of the Dallas Mavericks professional basketball team, and conservative political commentator Bill Bennett to host separate shows. The company also said it plans to start a channel of Catholic-themed programming with the Archdiocese of New York. Variety and Sirius also reached a deal to do regular radio news reports on the entertainment industry from the magazine's offices in Los Angeles. Sirius also hired Loral Space & Communications to design a new satellite that would improve reception. The bird is expected to cost $260 million and be delivered in 2008. BY THE NUMBERS: Wall Street is expecting the company to post a loss of 15 cents per share, according to a Thomson Financial poll of 29 analysts, which would be wider than the 13-cent loss from a year ago. Analysts expect revenue to nearly triple to $147 million. ANALYST TAKE: Merrill Lynch analyst Laraine Mancini reiterated her "Buy" rating on the stock after Sirius announced its blowout second-quarter subscriber numbers. "In our view, SIRI will continue to benefit in the retail market given its marquee content platform that attracts retail consumers that have a choice of service," she wrote. WHAT'S AHEAD: Sirius subscriber growth has been fueled by the "Howard effect," so analysts will be watching to see how long Stern's impact will last. Sirius could get a boost in late summer when it rolls out its package of National Football League broadcasts, but the final word on the FCC compliance problems is still in the air. Analysts are also likely to ask about comments made in late June by Mel Karmazin, CEO of Sirius, who said he would be interested in Sirius buying XM at the right price but acknowledged that regulatory issues "would be a question mark." STOCK PERFORMANCE: Sirius shares slid 6.3 percent in the period to finish June at $4.75. Its stock is down 38.2 percent year-to-date and hit its 52-week low of $3.60 in May. Link to article: HERE7/31/2006 04:06:00 PM
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Highly Unlikely that FCC Will Recall Satcaster Devices, But The NAB Persists
NAB Asks FCC To Recall Satcaster DevicesJuly 31, 2006 ( www.fmqb.com) NAB President/CEO David Rehr has penned a letter to FCC Chairman Kevin Martin, asking that the Commission recall satellite radio devices that are not compliant with FCC regulations. In his letter, Rehr writes that the "NAB continues to be concerned about the interference caused to free over-the-air radio services by satellite radio devices not in compliance with the Commission’s rules. To ensure that the scope of this problem is not expanded, NAB urges the Commission to take steps to halt the further distribution and sale to consumers of additional satellite radio devices failing to comply with Part 15 of the Commission’s rules." link to full article: HERE7/31/2006 03:57:00 PM
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Analyst Comments Going Into Sirius Earnings Release Tomorrow
Live In Play ( www.briefing.com) 31-Jul-06, 15:11 SIRI Sirius Satellite: Earnings Preview (4.25 +0.11) -Update-
SIRI plans to release 2Q06 earnings tomorrow morning with analysts expecting ($0.15) on revs of $147.04 mln. Barrington Research expects the co to report EPS of ($0.15), matching the consensus mean est. Firm's est had previously been $(0.14) but the added SAC costs associated with the co's success in adding subscribers at a faster-than-anticipated rate had an immediate negative impact on reported EPS. Firm says SIRI's momentum at the retail level appears likely to persist. Morgan Joseph notes the co previously reported net subscribers of 600,460 for the quarter. Based on its subscriber addition trends, firm remains confident that the co's goal of 6.2 mln subscribers and $600 mln in revs by 2006 year-end is achievable. Stanford says that SIRI added over 600,000 net new customers in Q2, beating expectations for 550,000. SIRI added over 200,000 more customers in the period than its competitor XMSR. This should put SIRI on track to reach 6.3 mln subscribers by the end of Y06. Thursday, XMSR reported Q2 results and mentioned market share losses to SIRI, most noticeably in the retail market. Firm believes SIRI should continue its retail dominance entering the 2H06. Firm projects that SIRI will serve 6.3 mln customers by the end of Y06 and 9.3 mln by the end of Y07. 7/31/2006 03:26:00 PM
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Opie & Anthony Take on Chicago
O&A Replace Rover In ChicagoJuly 31, 2006By Mike Boyle, Billboard Monitor "Syndicated morning personalities Gregg “Opie” Hughes and Anthony Cumia will be replacing Shane “Rover” French on CBS talk WCKG (Free FM) beginning Aug. 1.Rover has been on the station for only eight months. He replaced Howard Stern when “The King of All Media” jumped to Sirius Satellite Radio.With this new affiliate, the XM Satellite Radio “Opie & Anthony Show” is now syndicated into 20 terrestrial radio markets via CBS Radio and Citadel Broadcasting. There's also unconfirmed speculation that O&A will be picking up CBS Radio talk KIFR (Free FM), San Francisco, which currently airs Adam Carolla's syndicated morning show.The Chicago Sun-Times says that Rover’s show will continue on his other affiliates, including Cumulus rock WKRK Detroit; Emmis modern rock KPNT St. Louis; CBS Radio’s modern rock WAQZ Cincinnati, rock WAZU Columbus, modern rock WMFS Memphis and modern rock WZNE Rochester; and Nassau Broadcasting rock WPXC Cape Cod. He’ll be based out of his former flagship, CBS Radio modern rock WXRK (92.3 K-Rock) Cleveland..." Link to full article: HERE7/31/2006 12:27:00 PM
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Analyst Comment This Morning: Stifel Reiterates Buy On XMSR
XM Satellite Radio-XMSR stock price more than reflects concerns, reit buy@STFL(theflyonthewall.com 07/31 09:19:36) Stifel believes subscriber guidance is now beatable and that the company has ample cash liquidity. Target lowered to $16 from $20. 7/31/2006 10:36:00 AM
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Sirius Increases It's Presence in the OEM Market With Mitsubishi
Mitsubishi to Make SIRIUS Satellite Radio Standard or Factory Option on All Models in 2007
(PR Newswire 07/31 08:00:44) NEW YORK, and CYPRESS, Calif. Mitsubishi Motors North America and SIRIUS Satellite Radio (Nasdaq: SIRI) today announced that Mitsubishi will offer SIRIUS as a standard feature or factory option on four models this fall, and throughout the entire 2008 Mitsubishi model line, available in the United States next year. This fall, SIRIUS will be standard equipment on the model year 2007 Galant RALLIART, Endeavor SE and all Raider LS and DuroCross double cab pickup trucks. On most other trim levels of the Galant, Endeavor and Raider and on the all-new Outlander, SIRIUS will be available as a factory option. All SIRIUS-equipped vehicles will include a six-month, pre-paid subscription. "Mitsubishi is excited about adding SIRIUS to more of its vehicle lines a sa standard feature or a factory option," said Mike Krebs, Vice President of Product Strategy at Mitsubishi Motors North America. "Our goal is to offer Mitsubishi customers the very best in-vehicle experience possible, and we believe that SIRIUS' unique programming greatly enhances our quality offering." "Mitsubishi has been a great partner in the growth of SIRIUS, and we are very pleased that they have decided to expand the number of vehicle lines offering SIRIUS," said Mel Karmazin, CEO of SIRIUS. "Now, more Mitsubishi drivers will be able to experience for themselves the best programming available on radio."
7/31/2006 08:09:00 AM
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A Stock Fund For Nascar Fans
Sunday, July 30, 2006, Investing, The New York Times Follow Your Bliss, Yes, but Maybe Not Into a Stock FundBy J. ALEX TARQUINIO (link to full article: HERE) "IF you want a broad stock portfolio in a single mutual fund, you might buy a plain-vanilla Standard & Poor’s 500 index fund. But if you’d like something quirkier, with more horsepower and much more torque, you might prefer the StockCar Stocks Index fund. It is the perfect portfolio for Nascar race fans, said Robert T. Carter, the fund’s manager. “That would be the logical target market,” he said. “Many Nascar fans have significant assets. This may be a complement to their existing asset management philosophy." Its core holdings include the two publicly traded car race track owners, Speedway Motorsports, which is based in Concord, N.C., and International Speedway, based in Daytona Beach, Fla. But two stocks wouldn’t be enough to constitute an entire mutual fund, not even an eccentric one. So Mr. Carter rounds out the portfolio with official Nascar sponsors and suppliers. General Electric — the conglomerate based in Fairfield, Conn. — qualifies because it owns NBC, which broadcasts Nascar races. Home Depot, the home improvement chain based in Atlanta, and Kellogg, the cereal maker based in Battle Creek, Mich., are in the fund because they are Nascar sponsors. No one can say precisely how many more cornflakes are served in American kitchens each morning because there’s a picture of a race car on the box. But the Nascar connection constitutes the entire strategy of this mutual fund. Mr. Carter said he did not evaluate the stocks but acted like the passive manager of an index fund, strictly eliminating companies that end their race-car sponsorships and adding companies that take them on. Roy Weitz, the publisher of FundAlarm.com, said he was not surprised that it had outperformed the S.& P. index over long stretches. “The idea that these stocks should be arranged in a portfolio because they support Nascar is sort of an absurd concept, but it appears to be working,” he said. Nascar fans have certainly been loyal — both to their sport and to their fund, which Mr. Carter has managed since its inception in 1998."7/30/2006 11:00:00 PM
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XMSR Files Form S-4 With The SEC, Offer To Exchange Notes
Link to filing: HEREXM SATELLITE RADIO INC. XM SATELLITE RADIO HOLDINGS INC. OFFER TO EXCHANGE $600,000,000 9.75% SENIOR NOTES DUE 2014 AND GUARANTEED BY XM SATELLITE RADIO HOLDINGS INC., XM EQUIPMENT LEASING LLC AND XM RADIO INC. FOR $600,000,000 9.75% SENIOR NOTES DUE 2014 AND GUARANTEED BY XM SATELLITE RADIO HOLDINGS INC., XM EQUIPMENT LEASING LLC AND XM RADIO INC. AND REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND OFFER TO EXCHANGE $200,000,000 SENIOR FLOATING RATE NOTES DUE 2013 AND GUARANTEED BY XM SATELLITE RADIO HOLDINGS INC., XM EQUIPMENT LEASING LLC AND XM RADIO INC. FOR $200,000,000 SENIOR FLOATING RATE NOTES DUE 2013 AND GUARANTEED BY XM SATELLITE RADIO HOLDINGS INC., XM EQUIPMENT LEASING LLC AND XM RADIO INC. AND REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED Interest on 9.75% Senior Floating Rate Notes due 2014 payable May 1 and November 1, Commencing November 1, 2006. Interest on Senior Floating Rate Notes due 2013 payable May 1, August 1, November 1 and February 1, Commencing August 1, 2006. 7/28/2006 11:01:00 PM
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Reuters' Analysis of The "Perform Act"
Satellite, traditional radio join in royalty fightBy Sue Zeidler, LOS ANGELES, July 28 (Reuters) - Traditional radio companies and satellite radio broadcasters may be locked in a war for listeners, but the two rivals are united in a battle against the recording industry over royalties. The dispute centers on what radio companies say is a legislative effort by the recording industry to raise royalties and restrict certain recording technologies, which are both at the heart of a multi-billion dollar lawsuit filed against XM Satellite Radio Holdings Inc .
Earlier this month, XM asked a federal judge to throw out the record industry suit that claimed it turned its portable radio, the Pioneer Inno, into a music-download service without paying the higher royalty fees required....
Link to full article: HERE7/28/2006 10:34:00 PM
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HD Radio Kicks Off Marketing Campaign
The High Definition Radio Alliance is trying to get the word out. Since practically no auto manufacturers have signed on for OEM installation (BMW is the exception), potential purchasers will have to browse the aisles at retailers, which I think will utimately increase awareness and drive consumers to chose satellite radio. HD Radio Alliance To Kick Off Major Marketing CampaignJuly 28, 2006, www.fmqb.comThe HD Digital Radio Alliance will launch a new major marketing campaign this Monday in 50 markets around the country. The "Discover It!" campaign will roll out a new brand identity for HD Radio, with new advertising elements on-air and online and much more. It is part of the Alliance's $200 million dollar campaign announced last December. The "Discover It" campaign will make the HD Alliance one of the top two advertisers in each market, with over 90 spots in rotation. The new ads can be heard at http://www.hdradioalliance.com/. “The Alliance has been aggressively marketing HD Digital Radio since our inception,” said HD Alliance President/CEO Peter Ferrara. “The marketing campaign announced today represents the full range of our commitment to helping consumers discover this amazing new technology – from compelling branding and creative to a strong online presence to retail availability.” HDRadio.com will also be revamped, with more features and information about HD Radio. Amazon.com will also begin carrying HD-ready receivers. 7/28/2006 06:51:00 PM
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A Possible Marketing Strategy for XM
July 28, 2006 During the conference call XM Satellite radio announced the method by which subscribers for Nissan, Toyota, and Hyundai would be counted. In simple terms the method is that they will not be counted until the promotional period is over. Those that keep the service will become counted subscribers, and those that don't will never have been counted. This method has a few effects: 1. There are radios out there with listing ears in promotional periods that are not counted. 2. Because XM is footing the bill for the promotional period, there is no revenue. If these subscribers were to be counted, it would have a negative impact on ARPU. By not counting them, ARPU can remain high. This is good. You want to keep ARPU as high as possible. 3. The structure of this method lessens the deactivations line item. A vehicle in this category will have never been termed as a subscriber, so thus would not be termed as a deactivation. Now, this strategy has some big potential benefits for XM. It gives them the ability to market their service in a way that they have not really used before. Let's assume that the promotional period is 3 months with a 1 month buffer at the end for customer retention efforts, etc. In the first year, XM could then collect 8 months of revenue at $12.95 per month. This would equate to $103.60. This is the best overall scenerio. Now, what if XM made the consumer an offer when they were activating their radio. An offer such as this: " Your car comes with a 3 month promotion for XM service. If you pay for a one year subscription now, we will give you an additional 3 months free. This would mean that you would effectively get 18 months of XM service for the price of 12."In effect, XM would reap many benefits from this method.1. They would lock up a subscriber for 18 months (basically unchurnable). 2. They would begin to get revenue immediately to offset subsidy costs. 3. They could add this person to the subscriber rolls and count right away. 4. They would avoid the hassles associated with month to month subscribers. 5. They would effectively turn the initial activation call into a marketing call as well. 6. They would likely be able to increase the take rate. This is just a little bit of thought into the process. Mabey XM already had this in mind......We here at SSG believe that at least this, or something similar should be explored. 7/28/2006 04:18:00 PM
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Sirius Starmate Replay Tops The NPD List For June 2005-May 2006
SUCCESS STORY: Directed Electronics Sirius Starmate ReplayBy Staff -- TWICE, 7/17/2006 (link: HERE) The Sirius Starmate Replay receiver from Directed was the leading plug-and-play satellite radio receiver for the period June 2005 through May of this year, according to The NPD Group. Introduced in September 2005, it has a 44-minute memory buffer at a suggested retail price of $99.99. It reached first place over the XM Delphi Roady2 by 1 percentage point. Top 10 Plug-And-Play Satellite Radio BoxesUnit volume share at retail, June 2005-May 2006 Sirius DEI Starmate Replay XM Delphi Roady2 Sirius DEI Sportster Replay XM Delphi SkyFi2 Sirius XACT Communication Sirius DEI Starmate XM Delphi Roady XT Sirius DEI Sportster SV1 Sirius One XMC10 XM Receiver Source: The NPD Group © TWICE 2006 7/28/2006 03:47:00 PM
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 Elvis Week 2006 on SIRIUS Satellite Radio(posted by www.orbitcast.com) Can't make it to Memphis to partake in the enjoyment of Elvis Week? Well stop your crying, because Elvis Radio, SIRIUS' all-Elvis-all-the-time channel, will be covering the annual celebration from August 8th through August 16th to commemorate Elvis's death on August 16, 1977. Hosted by George Klein (a close friend of Elvis's and regular Elvis Radio host), you'll get a slew of in-depth reports, celebrity guest DJs, and fan interviews throughout the week. The event is punctuated with the annual Candlelight Vigil, where thousands of fans carry lit candles to Elvis's gravesite at Graceland. Check out the riveting schedule after the jump... 7/28/2006 03:39:00 PM
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A Nice Upward Day For XM
July 28, 2006 Back on July 11, SSG published an article titled " Good News XM Could Use". In the piece, we outlined some potential items that we felt would be factors for XM Satellite Radio going forward. Now, on the heels of the XM conference call, we thought it would be good to review what we had stated and where we are today. Items we outlined, and where we are today: 1. The announcement of 7,000,000 subscribers. This news should be about a week away for XM, and the earlier it is delivered the better. A subscriber addition rate of 6,000 NET subs per day would give us the 7,000,000 milestone on July 18, and would show a nice improvement on the 4,374 posted in the second quarter. An addition rate of 5,000 per day would still show a nice improvement and would bring the announcement on July 21st. The key here is showing an improvement. XM did announce 7,000,000 subscribers, but did not indicate when it happened. Given their guidance going forward, it is likely that it came a bit latter than we had hoped, but being able to announce it at the call was a big step. Kudos to XM2. It would be very positive to see XM reiterate their subscriber guidance of 8,500,000 by year end sometime soon. Reiterating this, perhaps in conjunction with a 7,000,000 announcement might ease some concerns on the street. XM did not reiterate guidance, but instead took a tact that likely had an even more powerful impact. They lowered it to what many people feel is a VERY reachable goal, and then outlined that worst case scenerio. The effect here was likely much more profound then trying to reiterate the 8.5 million. There is likely not a person that follows this equity that can imagine a miss of 7.7 million. It also now gives XM the room to move upward at a later date. 3. The earnings report. Even though the subscriber number disappointed some, it can be offset by a more powerful metric in the financial status of the company. Good financial metrics will give people an understanding that the company is on a good financial path. Clear and concise discussion of the financial metrics will be seen as an overall positive and offer direction to investors. XM had a very good quarter financially, and this was not missed by the street. Their loss from operations improved dramatically over last year, and their statements relative to getting to Free cash Flow Positive were encouraging.4. A statement that FCC issues are resolved, and that inventory levels will be sufficient to meet demand as well as guidance. While complete resolution with the FCC issue has not yet happened, XM did discuss the issue. This was very good. XM stated that it is now the testing procedure that is under review (something Sirius also spke to last week). The confirmation from both companies that the issue is actively being addressed is very powerful for the sector. Hopefully we can see a positive announcement involviong testing procedures in the next couple of weeks.5. An announcement regarding the FTC issues, and where that stands. At this point the company has likely already responded to the FTC complaints and addressed them. News that the issues are resolved and impact was minimized would bolster the other positive news. This issue does not seem to be high on the radar screen anymore, and if the issue has been fully addressed, which we believe it has, then it is probably best to leave it off the radar screen.6. Some news regarding the RIAA lawsuit. Perhaps even something as simple as where things stand would take some worry out of the equation. Are the parties negotiating, or is this headed to a courtroom. XM has done well to spell out their feelings, but it is still very unclear as to what a timetable is on the issue. Removal of question marks in the minds of investors would be positive. We were pleased to see XM discuss the issue at the call. Even though there is not much that can be said about the suit, the update reassures investors that the issue is being addressed and not ignored. XM has asked that the suit be dismissed.7. XM has the Oprah Channel starting in September. Establish a date, and give people something to look forward to. Sirius and Howard Stern did very well by letting everyone know exactly when Howard was coming. XM should take a page from the Sirius playbook, and establish a date for Oprah and begin to market her and the debut. News relative to Oprah is beginning to flow. XM has done some on air previews, and they stated that Oprah will be a centerpiece of their marketing efforts. The only additional item we here at SSG would like to see is for Oprah to also give the show on XM a bit of a "push"We had also pointed out some longer term items that we felt XM should address. Again, they seemed to hit some of what we felt were key points:1. An announcement relative to OEM partners. GM and Honda have given specific installation and penetration targets. XM should reiterate these. They should also add more specific details about Hyundai, Toyota and Nissan. Show the path that the OEM sector for XM is on. XM did cover this item pretty well. It appears that roll-outs of some programs may not be a quick or as robust as some were expecting, but at least an indication was made, and investors have a clearer picture on the short and long term installations.2. Talk about the launch of XM 4. Explain the benefits it gives the XM constellation and discuss how it bolsters the service. Suprisingly this issue was not really covered. It would have been a good chance to speak about improving the service, etc. Perhaps we will see more flavor as the launch nears.3. Talk about the financial metrics that have been achieved, and point out that goals are being set, are realistic, and there is a focus to achieving them. This will help bolster investor confidence. If XM still anticipates operational cash flow positive in the fourth quarter they should talk about it, and outline what it is that will get them there. XM did a great job with speaking about the financial metrics. Not much more needs to be said here.As the conference call approached, we here at SSG published and article about a potential buying opportunity in the equity. That artlle was titled "XM - Is there An opprtunity Going Into Earnings?" We outlined several key components that we thought could have an impact on the stock price. Those items were:1. Explain management changes...what does this accomplish? 2. Discuss Q2 subscriber disappointment...what happened? 3. Update on FM modulator issues with FCC...what's the timing? 4. Update on RIAA, expected outcome 5. Marketing department shake up...discuss new direction5. Future guidance, subs, churn, costs, etc. 6. Partnerships 7. New hardware 8. Sales of wearable devices, how are they going? 9. Opie & Anthony, what's the business deal? 1o. Guidance for CFBE...is it still 2007? XM Satellite Radio addressed almost all of these issues. It was great to see this happen, and the movement in stock price has been great. Investor confidence seems to be gaining. With Sirius reporting on August 1, 2006, the sector stands a good chance of seeing some nice up-lift. Congratulations XMSR, and we look forward to the Sirius call. 7/28/2006 03:34:00 PM
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CBS To Contest Janet Jackson Fine
CBS Files Appeal To Contest Janet Jackson Fine In CourtCBS has paid its $550,000 FCC fine for the now-infamous Janet Jackson/Super Bowl incident, but the network has only done so because it can now contest the fine in court.In a statement, the network announced, "CBS is filing today an appeal with the United States Court of Appeals for the Third Circuit seeking to overturn the FCC's finding that the 2004 Super Bowl half-time broadcast was legally indecent. A prerequisite for filing this appeal is to pay the $550,000 fine, which we are also doing today only for this procedural reason.""CBS has apologized to the American people for the inappropriate and unexpected half-time incident, and immediately implemented safeguards that have governed similar broadcasts ever since. However, we disagree strongly with the FCC's conclusions and will continue to pursue all remedies necessary to affirm our legal rights."Visit FMQB.com for more on this Breaking News story... 7/28/2006 11:56:00 AM
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Atmosphere Radio???
 July 28, 2006 The quick eyes over at Engadget picked up on some interesting happenings at samsung. Seems the electronics giant is working on a method to use the atmosphere as a virtual antenna, or medium, for which to send communications. Story Excerpt: Samsung working on atmospheric broadcasting Posted Jul 28th 2006 7:53AM by Darren MurphFiled under: Cellphones, WirelessYou never know what you'll find when digging through the US Patent files, and it has been discovered that Samsung has filed one of their own in hopes of using the atmosphere as an antenna. Researchers and employees in Korea are devising a method to use the ionosphere...... Interested SSG readers can catch the whole story HERE via Engadget 7/28/2006 10:36:00 AM
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Motley Fool Comments On XMSR Earnings & Stock Action
Picking Up the XM Pieces
By Rick Aristotle Munarriz (TMFBreakerRick) July 28, 2006 It's a pretty good sign that your stock has hit rock-bottom when the company reports bad news and the shares shrug it off and inch upward anyway. That's how things went on Thursday for XM Satellite Radio (Nasdaq: XMSR). The beleaguered pioneer's shares inched 5% higher even though it posted another quarterly loss and lowered its guidance for the number of year-end subscribers to its satellite-radio service. Sure, revenues soared 82% higher to hit $228 million while analysts were expecting only a 77% improvement. That number was mostly the result of year-over-year subscriber growth of 56% and the 30% price hike it instituted during the spring of 2005. The losses continue, naturally, but XM is still confident that it will achieve positive cash flow on an operating basis by the final quarter of 2006. The trend should continue for 2007 on the whole. So far, so palatable. No one is looking for satellite radio to grow into a fat-margin breeding farm for a few years. Cynics may argue that it will never get there. The rub in yesterday's report came with the announcement that XM is looking to close out the year with 7.7 million to 8.2 million subscribers. To place that in its proper perspective, we need to take a three-minute tour of the company's growth trajectory in the past. No flash photography, please. The ups and downs of XMThrough the summer of 2005, XM was growing at a torrid pace. Stepping up to the podium to discuss subscriber trends often meant ratcheting up expectations to higher user targets. Momentum slipped over the holidays, just as Howard Stern was gearing up to start his five-year stint at rival Sirius (Nasdaq: SIRI). The company that had historically underpromised and overdelivered blew it. XM came up short on the 6 million subscribers it had looked to close out 2005 with. It then tossed out a 9 million-member figure for 2006 that seemed doable until it became clear that XM had handed the market leadership baton to Sirius. That's the reason yesterday's move to scale back subscriber targets didn't really catch the market by surprise. A few weeks ago, after Sirius posted more net subscriber additions than XM did for the third straight quarter, I was skeptical of XM's already lowered year-end subscriber target. Here is what I wrote at the time: Anyone with a calculator and a penchant for train wrecks can see that XM may let us down one more time. Back in May, XM announced that it intended to close out the year with 8.5 million subscribers. It had originally planned to end 2006 by lapping the 9 million mark. On the other hand, Sirius expects to wrap up the year with 6.2 million subs. In other words, over the next six months, XM expects to land 1.6 million more net new users, with Sirius projecting just 1.5 million net new subscribers. How? If the baseball-charged second quarter didn't do it, how will XM outmuscle Sirius when the playing fields of choice go from diamonds to gridirons? XM will have "its Oprah moment" in a few months, but that's a wild card, since Oprah's emphasis will remain with her syndicated television show. What would it take for XM to avoid another heartbreak? Will next month's earnings report bring that 8.5 million year-end target to a round 8 million, or will the announcement come in early October instead? Well, XM ripped the Band-Aid off sooner rather than later. Thankfully, it's been ripping other bandages off quickly to let the healing process start sooner. This past week alone, it made nice with ASCAP on the music side and let the market know that it's not afraid to rattle the executive ranks by stripping CEO Hugh Panero of one of his hats and naming Nate Davis president and COO. Maybe it is different this timeI was probably at my harshest in taking XM to task on Monday in a somewhat scathingly critical commentary. All I wanted, I guess, was five minutes in the XM boardroom. I wouldn't have said a single word. I just would have brought in a boom box, held it over my head Cusack-style, and let Twisted Sister's "We're Not Going to Take It" ring out. I was just sick and tired of watching XM let itself be bullied by competitors like Sirius or terrestrial radio without putting up much of a fight. The way things had been going at XM over the past few months, any change would have likely been a change for the better. It had become a shell of the first mover that was the early favorite, when it landed content-distribution deals through outlets that matter -- including Starbucks (Nasdaq: SBUX) and JetBlue (Nasdaq: JBLU) -- and was the receiver of choice through a majority of the new-car market. I'm not sure when XM jumped the shark, but this week has that twinkle of a spark behind a company that may have gotten its........... Link to entire article: HERE7/28/2006 09:59:00 AM
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RBCM Lowers Target On XMSR
XM Satellite Radio-XMSR target lowered to $20 from $26-OP@RBCM -(theflyonthewall.com 07/28 09:24:11) RBCM lowered its target to $20 after XMSR reported a weak Q2 report and revised fiscal 7/28/2006 09:37:00 AM
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Wall Street Journal Comments On XMSR Earnings
XM Loss Widens,And User OutlookIs Lowered Again
By SARAH MCBRIDEJuly 28, 2006; Page A12, WSJ (Link: HERE) XM Satellite Radio Holdings Inc. posted a wider second-quarter loss and again cut its subscriber estimate for the year. The subscription radio service reported a net loss of $231.7 million, or 87 cents a share, compared with a loss of $148.8 million, or 70 cents a share, a year earlier. The latest loss included $105 million in charges, largely from debt restructuring. Revenue grew 82% to $227.9 million from $125.4 million. The Washington, D.C., company slashed its subscriber estimate to a year-end total of 7.7 million from 8.2 million. At the start of the year, XM forecast nine million subscribers; in May it cut that estimate to 8.5 million. The company blamed a weaker overall retail environment along with problems with its popular "plug-and-play" units. Because of a Federal Communications Commission investigation into how those radios transmit programming to car stereos, the company has had to pull many of them from store shelves. Sirius Satellite Radio Inc., the company's competitor, has been trouncing XM in that retail market. XM Chief Executive Hugh Panero said on a conference call with analysts the retail sales are "unacceptable, and our focus and objective is to regain market share." One strategy, he said, is to heavily promote a new show with Oprah Winfrey, who is scheduled to begin an exclusive radio program on XM in September. XM's share price rose 53 cents, or 5.1%, to $10.89 as of 4 p.m. in Nasdaq Stock Market composite trading. Analysts said the stock gained because of a sense the company had announced all of its bad news, and short sellers were covering their positions. Lower subscriber numbers may affect one of the company's biggest goals for the year: reaching break-even cash flow from operations in the fourth quarter. While he still expects to meet that goal, "our ability to do so becomes very challenging on the lower end of the subscriber range," Mr. Panero said on the call. The company said churn -- the share of customers who don't renew with XM -- rose to 1.83% from 1.42% at the end of the same quarter a year earlier. Company officials said the percentage of people who activate XM subscriptions after buying a new car fell slightly, to 54.5% from 57.6%, and would decline further in the third quarter. The company said one of its radio manufacturers had accidentally turned off the free trial subscriptions, typically three months, that the company uses to hook car buyers on XM, but said the manufacturer had now fixed the problem. It didn't disclose the manufacturer or affected car brands. 7/28/2006 09:11:00 AM
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Bear Stearns Weighs In On XMSR
XM Satellite Radio-XMSR uncertainty still remains concerning outlook-UP@BEST(theflyonthewall.com 07/28 08:54:45)- The firm is still concerned over demand, especially since SIRI has been gaining substantial market share. Management continues to work on dealing with the FCC issues in order to start manufacturing and shipment of radios. 7/28/2006 09:02:00 AM
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XMSR Downgraded To Sector Peformer From Outperfomer By CIBC
XM Satellite-XMSR downgraded to Sec Performer from Outperformer@CIBC(theflyonthewall.com 07/28 06:34:41) CIBC downgraded shares given the lack of visibility into an FCC resolution,lowered guidance, and their belief that new hires will not significantlyimpact sales. 7/28/2006 08:49:00 AM
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On Sirius: Alexis Stewart's Show Gets Attention
 SEX, NO CUPCAKESBy RICHARD JOHNSON with PAULA FROELICH, CHRIS WILSON and BILL HOFFMANN New York Post, July 28, 2006 -- SIRIUS Satellite Radio execs have no qualms with the risqué direction Mar tha Stewart's daughter, Alexis, has taken with her show, "Whatever," on her mom's channel. Alexis recently told co- host Jennifer Koppelman Hut about a sex romp with Peter Cook (before he married Christie Brinkley) and how he was not so memorable in the sack. She also said Oprah Winfrey looked "dikey" on the cover of this month's O magazine. Some radio insiders say that sort of banter might be a bit much for the housewives tuning in for cupcake recipes and decorating tips and "moth ers driving their kids home from work," as one put it. But Sirius spokes man Patrick Reilly downplayed the issue...........Link to entire article: HERE
7/28/2006 07:51:00 AM
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Daimler Chrysler Reports Earnings
DaimlerChrysler Doubles Its Profits
By NICK BUNKLEY, New York Times (link to full article: HERE) "DETROIT, July 27 — Higher sales of Mercedes Benz cars helped DaimlerChrysler double its second-quarter profits, despite a slump at Chrysler that the automaker warned would worsen in the months ahead. The company said today that operating income rose 11 percent from the comparable period a year ago, reaching 1.86 billion euros ($2.4 billion), even though it sold 3 percent fewer vehicles, or 1.3 million in all. DaimlerChrysler, which is cutting thousands of jobs in Germany, reported overall net income of 1.8 billion euros ($2.3 billion), up from 737 million euros ($942 million) in the second quarter of 2005. Much of the net profit came from a revaluation of the company’s stake in the European Aeronautic Defense and Space Company, parent of the jet manufacturer Airbus. The results show considerable progress in the company’s efforts to rejuvenate its Mercedes unit, but growing problems at Chrysler, the American division, as it prepares to introduce new models later this year. The Chrysler Group’s operating profits fell by 91 percent in the quarter to $65 million; DaimlerChrysler’s chief executive, Dieter Zetsche, forecast that next quarter would be much worse for the group, with Chrysler expected to lose as much as $639 million. But Mr. Zetsche said that Chrysler would rebound in the fourth quarter, as new models like the 2007 Dodge Nitro, Chrysler Sebring and Jeep Patriot arrive in showrooms. The unit will make money for the full year, he said...." 7/27/2006 10:36:00 PM
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XM Satellite Radio Transcript
 July 27, 2006 Satellite Standard Group keeps you informed. Investors that have not yet heard the call can read the trascript here: Hello, everyone, this is Joe Titlebaum, General Counsel of XM Satellite Radio. Before we begin our prepared remarks, I would like to remind everyone that certain information on this call may contain forward-looking statements. Due to a number of factors, our actual results may differ materially from those projected in such forward-looking statements. Those factors include future demand for the company's service, the company’s dependence on technology and third-party vendors, and the potential need for additional financing, as well as other risks described in XM Satellite Radio Holdings Inc.’s Form 10-K filed with the Securities and Exchange Commission on March 3, 2006. Copies of this filing are available online and upon request from XM Radio's Investor Relations department. I will now turn the call over to Hugh Panero, CEO of XM Satellite Radio. Hugh Panero Good morning, everyone, and thank you for joining us. On the call with me are: Gary Parsons, Chairman; Nate Davis, our new President and Chief Operating Officer; Joe Euteneuer, our Chief Financial Officer; Steve Cook, Executive Vice President of Automotive; Eric Logan, Executive Vice President of Programming; and Joe Titlebaum, whom you just heard from. At the onset, I would like to make some basic points regarding XM Radio, the satellite radio industry, and our current position. XM created the satellite radio category as a major consumer business. We have been the industry leaders since the first satellite radio subscriber in November, 2001. By the end of the second quarter of 2006, we are generating more than $225 million a quarter in revenue, with total revenue of more than $900 million expected for the full year 2006. We currently have more than 7 million subscribers. This quarter alone, nearly 1 million consumers -- that is new gross subscriber additions -- became new XM Radio subscribers. Our high customer satisfaction, appealing content, and far-reaching distribution channels positions us to continue significant growth on a sustained basis. At the same time, and as most of you are well aware, we face a number of marketplace, operational and regulatory issues. We will navigate through these issues with the focus and determination that enabled us to launch and lead this emerging industry......... The whole transcript can be read HERE via seeking alpha 7/27/2006 09:15:00 PM
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XM Sets The Stage For Upward Movement
 July 27, 2006 Despite over 6 months of bad happenings for XM Satellite Radio, they had what can only be considered a good call today. Yes, some of the numbers were not impressive, but the direction of the company is what really made the day. XM spoke to many of the issues that have been ailing the company of late, and did what is likely the best thing that could have been done. They set goals and guidance that are obtainable, and in doing so illustrated that the upward process is a "one step at a time" activity. XM laid out a worst case scenario, and indicated that even if that scenario were to happen that Free Cash Flow would still be around the quarter. Initial reaction to the lowered subscriber guidance was not good. The stock traded down sharply in pre-market, and continued in the red until management spoke. Gone were excuses and dodging, and in was some straight forward talk about where XM was headed. This is exactly what the street was looking for. The lowered guidance effectively changed the expectations of the street and the company. Last year at this time XM raised subscriber guidance by 500,000 subscribers. This was the beginning of the troubles for XM. They had raised the bar to high. This year we see the exact opposite. On the heels of what can only be categorized as a steady flow of bad news, XM took a new tact. They built the bad news into the expectations, and laid out a baseline rather than shooting for the stars. It is almost as if the outlined a fresh start, and the street responded nicely. Until the past year, XM had a relative easy street in the sector. They were observed as the leader, and things were going so well it seemed impossible that bad times would come. Some bad decisions were made, and efforts to rectify the situation often fell short as well. Today XM took the first steps in moving in the right direction. Now, this new XM is something that we have not really seen as yet. They will need to show that the steps they are implementing are indeed moving the company in the right direction. We here at SSG believe that the lowered subscriber guidance now has a built-in piece of good news. XM and Sirius are currently working with the FCC to establish the testing procedures and guidelines for the FM modulators. Should the new procedures be approved in the coming couple of weeks, and should XM resume production, they could conceivably be in a position to upgrade their 7.7 million low end to something in the neighborhood of 8 million. They would then be in a great position to review things again in the Q3 call. XM also did a good job of tempering the OEM expectations for this year. For whatever reason, expectations were for big ramp-ups from Hyundai and Toyota. Hyundai has started their program, as XM indicated previously they would. Toyota is not expected to begin until next year. The same is the case for Nissan. The missing component here is what installation rates Toyota would have. Given the guidance, it would appear that factory installs will not yet be wide spread. In our opinion XM should take additional steps to clarify the install rates of some of the manufacturers. XM seems to have shifted their focus from Toyota to Nissan in their call. Perhaps some additional information will be available at a future investor conference. Today seemed to offer a new and fresh start for the most part. Demonstration of meeting goals is the next step. Another aspect that the street noticed was that the loss from operations was down substantially. This was welcomed news. The loss from operations was about 48 million this year vs. About 88 million last year. A dramatic improvement that bodes well going forward. Not all obstacles have been cleared, but the course is now set and known by the street. This is what is what investors were looking for. 7/27/2006 09:01:00 PM
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S&P Ups XM Satellite To Hold (3 Stars) From Sell (2 Stars)
JULY 27, 2006 S&P Stock Picks and Pans S&P Cuts Dow Chemical, Ups XM Satellite
From Standard & Poor's Equity ResearchXM Radio : Ups to 3 STARS (hold) from 2 STARS (sell)Analyst: Tuna Amobi, CPA and CFAWe believe second quarter results were lackluster, and note sharply reduced management guidance. However, we think worst is over and, with shares down sharply year-to-date, we view them as fairly valued. XM Satellite Radio recently passed 7 million subscribers, and plans to revisit its subscriber growth targets after its third quarter report. Still, we see overhang on product shipment delays during the FCC emission probe, plus other unrelated legal and regulatory matters. We are also wary of more retail market-share losses to rival Sirius ( SIRI ). Our target price remains $12. (Link to article: HERE) 7/27/2006 08:39:00 PM
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Directed Electronics To Present At JP Morgan Conference
Directed Electronics, Inc. to Present at the 9th Annual JP Morgan Harbour Auto Conference
VISTA, Calif., July 27 -- Directed Electronics, Inc. , the largest designer and marketer of consumer branded vehicle security and convenience systems in the United States based on sales, and a major supplier of home audio, mobile audio and video, and satellite radio products, today announced that Jim Minarik, President and Chief Executive Officer, will present at the 9th Annual JP Morgan Harbour Auto Conference. The conference will be held August 7-9, 2006 at the Ritz-Carlton Hotel in Dearborn, MI. Directed's investor presentation is scheduled for 11:40 a.m. EDT on Monday, August 7, 2006. The presentation will be webcast live and will be available on the Investor Relations section of Directed Electronics' website at www.directed.com. For those who are not available to listen to the live broadcast, the call will be archived. 7/27/2006 08:31:00 PM
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When Is Jon Stewart Coming To Satellite Radio?
 Audio TV streams are already available on satellite radio, for example, CNN, CNBC, Bloomberg, etc. This needs to be further explored as a relatively easy-to-program content option. There are many TV shows that are well suited to this format. The one that pops into my mind most often is "The Daily Show with Jon Stewart". How many of us love the show but don't get to watch it because we have overlapping plans, can't stay up late enough or don't own a TIVO? I, for one, would love to listen to the audio stream on my satellite radio, and would pay dearly to do so! 7/27/2006 06:16:00 PM
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Reuters.com: The Tide May Be Turning For XMSR
Tuning into XM Satellite 27 Jul 2006 XM Satellite Radio airs a rough-sounding quarterly result but investors may be hearing a better tune. Reuters.com investment channel "XM Satellite Radio ( XMSR) reported a second-quarter result this morning that at first blush was a bundle of bad news. It reduced subscriber-growth guidance and acknowledged that its latest forecast might again have to be trimmed once the company gets a handle on how ongoing hardware issues will impact sales. But But investors are sensing better days ahead. After initially dropping about 5 percent, the company's shares spiked up over 5 percent. The company's problems have been well chronicled: high costs, federal regulatory issues concerning plug-and-play radio hardware, stock sales by executives and marketing practices, a Recording Industry Association of America (RIAA) challenge to storage of music on portable devices, a slowdown in subscriber growth, and compelling headlines from rival Sirius Satellite Radio ( SIRI), which continues to bask in the glow of its launch of Howard Stern programming. But the tide may be turning..." (link to full article: HERE) . 7/27/2006 05:33:00 PM
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MTV Special: 25th Anniversary Celebration On Sirius
Sirius Celebrates MTV’s 25th AnniversaryJuly 27. 2006, www.fmqb.comThe launch of cable TV channel MTV on August 1, 1981 changed Pop culture forever, and on its 25th anniversary, four of its original VJs will recall the momentous occasion exclusively on Sirius satellite radio.Sirius on-air hosts Mark Goodman, Nina Blackwood, Alan Hunter and Martha Quinn will celebrate the 25th anniversary of the launch of MTV in a two-hour Sirius special, Big ‘80s Celebrates MTV at 25. The special will air on Tuesday, August 1 at 10a.m. ET on channel 8, Big ‘80s. The four will share their memories of MTV’s launch and play songs from the videos the then-new cable channel aired during its first few hours of existence.“We all knew we were part of something really cool, really fun," said longtime VJ Mark Goodman. "I never imagined that we were part of something that would change Pop culture forever.” Goodman, Hunter, Blackwood and Quinn, along with the late J.J. Jackson, were the five original faces and voices of MTV when it debuted on August 1, 1981. Their tenure as hosts of the nation’s first music television network provided them with an in-depth and up-close perspective on the most popular Rock/Pop music and artists of the 1980s.On Sirius, they have been together again since May 2004 as on-air hosts on commercial-free music channel Big ‘80s, which plays all the hit music of one of the most diverse and exciting decades in popular music history. Jackson died suddenly in March of 2004. Following its premier broadcast, Big ‘80s Celebrates MTV at 25 will be repeated on August 1 at 4p.m. and at 9p.m. ET, and on August 2 at 3a.m. ET. 7/27/2006 05:18:00 PM
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Update on Senate Music Vote
Senate Delays Music Vote July 27, 2006By Brooks Boliek, The Hollywood Reporter SOURCE: TheHollywoodReporter.comThe chairman of the Senate Judiciary Committee has delayed a vote on legislation that requires satellite, cable and Internet broadcasters to pay fair market value for digitally transmitting music.While Sen. Arlen Specter, R-Penn., told Sen. Dianne Feinstein, D-Calif., that he was willing to have the committee vote on the legislation, he told her he did not think the legislation was ripe for committee consideration, according to a copy of the letter obtained by The Hollywood Reporter."I think it is unwise to try to move the bill unless a consensus is reached," Specter scrawled on the bottom of the typewritten letter.Feinstein had asked Specter to have the committee vote on the bill last week. The legislation is co-sponsored by Sen. Lindsey Graham, R-S.C., and Senate Republican leader Bill Frist, R-Tenn., and is being pushed by the RIAA, music publishers and musicians groups.They contend that the new digital offerings by broadcasters, satellite radio, cable and Internet companies unfairly compete against such download services as iTunes and Rhapsody, which pay royalties on digitally recorded music.Broadcasters, satellite radio and the other services oppose the legislation, contending that the new services allow people to do digitally what they can do in the analog world.While the committee would move the bill this week, the music industry remains confident that a deal can be worked out."We understand that the chairman has indicated that he is committed to continuing the process ... and is hopeful that a resolution can be reached promptly," an RIAA spokesperson said. "We are pleased with his commitment and will participate fully in the process." 7/27/2006 02:28:00 PM
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A Look At XM's Subscriber Pool
July 27, 2006 XM had Gross subscribers of - 926,281 XM had Net Subscribers of - 398,012 XM had Churn/Deactivations of – 528,269 XM had Gross Retail additions of - 408,695 XM had Net Retail additions of - 168,487 Of the 168,487 in Net retail additions, 133,743 came from the Family Plan , and 4,817 came from Data Services XM had Gross OEM additions of – 517,586 XM had Net OEM additions of - 229,525 XM Subscribers in Promotional periods – 573,144 XM Subscribers with rental cars – 41,841 SAC - $64 CPGA - $112 7/27/2006 09:31:00 AM
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XM Issues Quarterly Report
June 27, 2006 WASHINGTON, July 27 /PRNewswire-FirstCall/ -- XM Satellite Radio Holdings Inc. (Nasdaq: XMSR - News) today reported financial and operating results for the second quarter ended June 30, 2006, and it announced that it recently surpassed seven million subscribers. For the second quarter 2006, XM recorded gross subscriber additions of 926,281 and net subscriber additions of 398,012. XM finished the second quarter 2006 with a total of 6,899,871 subscribers, representing a 56 percent increase over the 4,417,490 subscribers at the end of the second quarter 2005. "Despite near-term challenges, XM's revenues grew in the second quarter by 82 percent compared to the same quarter last year and we were able to significantly bring down our adjusted EBITDA loss year over year," said Hugh Panero, CEO of XM Satellite Radio. "It's a testament to the appeal of satellite radio that XM recently surpassed 7 million subscribers." Second Quarter Financial ResultsFor the second quarter 2006, XM reported revenue of approximately $228 million, an increase of 82 percent from the $125 million reported in the second quarter 2005. The quarterly increase in revenue was driven by 56 percent subscriber growth year over year, and increases in average revenue per subscriber. For the second quarter of 2006, XM's subscriber acquisition cost (SAC), a component of cost per gross addition (CPGA) was $64 compared to $50 in the second quarter of 2005. CPGA was $112 compared to $98 in the second quarter of 2005. XM's net loss for the second quarter of 2006 was $229 million compared to a net loss of $147 million during the second quarter of 2005. The net loss for the second quarter of 2006 includes $105 million in de-leveraging and other non-operating charges that were not incurred during the second quarter of 2005. For the second quarter of 2006, the adjusted EBITDA loss (non-GAAP) improved to $46 million versus an adjusted EBITDA loss of $88 million in the second quarter of 2005. The primary differences between net loss and adjusted EBITDA are non-operating amounts and certain operating non-cash charges. For a full reconciliation of our net loss to adjusted EBITDA, see the attached financial schedules. XM Revises Subscriber Guidance
Based on current marketplace dynamics and regulatory uncertainties concerning 'plug-and-play' radios, XM today also reported a change to its subscriber guidance for 2006, projecting that it will end the year with total subscribers of between 8.2 million and 7.7 million. The company will refine this range at the end of the third quarter when it expects to have a firmer sense of regulatory progress and availability of product for the fourth quarter, as well as retail sales trends. With this revised subscriber guidance, XM still expects to achieve positive cash flow from operations for the fourth quarter 2006 and the full year 2007, although its ability to do so becomes challenging toward the lower end of the subscriber range. Nate Davis Appointed XM President and COO; XM Augments Marketing TeamNate Davis was recently appointed to the newly-created position of President and Chief Operating Officer at XM. Mr. Davis, who reports to Mr. Panero, is a seasoned telecommunications executive, having served in senior management roles at XO Communications, Nextel and MCI. He continues to serve on XM's Board of Directors, to which he was appointed in 1999. The company has also augmented its sales and marketing team with the appointment of a number of senior-level marketing executives who will report to a Chief Marketing Officer, to be named by Davis in the coming months to oversee all sales and marketing for the company. "Oprah & Friends" Channel Offers Preview in Advance of September Launch
In advance of its September 25th launch, the "Oprah & Friends" channel is now broadcasting an on-air preview of programming and personalities on its future home, XM Channel 156. The much-anticipated talk radio channel, exclusive to XM, will feature a broad range of original programming hosted by popular personalities from "The Oprah Winfrey Show" and O, The Oprah Magazine. XM Creates Dedicated Automotive GroupXM recently announced the creation of a dedicated automotive group to focus exclusively on XM's automotive strategic partnerships. The new group is overseen by XM veteran Steve Cook, who was recently named to the role of Executive Vice President, Automotive. XM is the leading provider of satellite-delivered entertainment and data services for the automobile market. XM is available in more than 140 different vehicle models for 2006. 2006 is also a staging year for significant growth in the volume of XM-equipped vehicles in 2007 and 2008, with annual factory installations of XM radios expected to double in the next two years. About XM Satellite RadioXM is America's number one satellite radio service with more than 7 million subscribers. Broadcasting live daily from studios in Washington, DC, New York City, the Country Music Hall of Fame in Nashville, Toronto and Montreal, XM's 2006 lineup includes more than 170 digital channels of choice from coast to coast: the most commercial-free music channels, sports, talk, comedy, children's and entertainment programming; and the most advanced traffic and weather information. XM, the leader in satellite-delivered entertainment and data services for the automobile market through partnerships with General Motors, Honda, Toyota, Hyundai, Nissan, Porsche, Suzuki, and Subaru, is available in more than 140 different vehicle models for 2006. XM's industry-leading products are available at consumer electronics retailers nationwide. For more information about XM hardware, programming and partnerships, please visit http://www.xmradio.com. Factors that could cause actual results to differ materially from those in the forward-looking statements in this press release include demand for XM Satellite Radio's service, the Company's dependence on technology and third party vendors, its potential need for additional financing, as well as other risks described in XM Satellite Radio Holdings Inc.'s Form 10-K filed with the Securities and Exchange Commission on 3-3-06. Copies of the filing are available upon request from XM Radio's Investor Relations Department. Full report HERE7/27/2006 08:38:00 AM
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Jessica Simpson On Sirius
 We thought readers might need a break from earnings season... Jessica Simpson to host Weekend Countdown on SiriusJessica Simpson, will host a special “fashionably late” edition of the SIRIUS Hits 1 Weekend Countdown this Thursday, July 27th at 5pm ET. SIRIUS Hits 1 Weekend Countdown features the 45 biggest songs based on SIRIUS Hits 1 airplay and listener requests, including Jessica Simpson's own new song, "A Public Affair," which comes in at #15 on this week’s countdown. Tune is as Jessica has a blond-moment when she confuses the stated sexual preferences of rap star Nelly with pop star Nelly Furtado. Via www.orbitcast.com ( LINK) 7/26/2006 05:56:00 PM
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Sirenza Reports Q2 Earnings, Raises Full Year Guidance
Sirenza Microdevices Reports Second Quarter 2006 Results; Record Revenue and Pro Forma Profit With Continued Positive Operating Cash Flow; Increases Full Year Guidance Wednesday July 26, 4:10 pm ET BROOMFIELD, Colo., July 26 /PRNewswire-FirstCall/ -- Sirenza Microdevices, Inc. (Nasdaq: SMDI - News) today reported its financial results for its second fiscal quarter ended June 30, 2006. Financial Highlights Revenue * Record quarterly revenue of $39.0 million; 87% sequential quarterly revenue increase * Year-over-year quarterly revenue increase of 156% * Record first half 2006 revenue of $59.9 million; 118% increase over the same period last year * SMDI segment quarterly revenue increased year over year by 64% and sequentially by 20% * PDI segment revenue represented 36% of consolidated Sirenza quarterly revenue Earnings * Quarterly gross margin of 37%, compared to 43% a year ago and 48% sequentially * Quarterly pro forma(1) gross margin of 44% compared to 43% a year ago and 49% sequentially * Quarterly net income of $2.1 million or 5% net income margin * Record quarterly pro forma net income of $7.2 million or 18% pro forma net income margin * Quarterly earnings per share of $0.05 per diluted share, compared to a loss of $(0.01) per share a year ago and $0.04 per share sequentially * Quarterly earnings per share of $0.16 per diluted share on a pro forma basis, compared to $0.01 per share a year ago and $0.09 per share sequentially Cash Flow * Quarterly cash flow from operations of approximately $3.7 million, or $0.08 per diluted share * Record first half cash flow from operations of approximately $9.1 million or $0.21 per diluted share * Eleven consecutive quarters of positive cash flow from operations Sirenza's second quarter net revenues were $39.0 million, compared with $20.9 million for the first quarter of 2006 and with $15.3 million for the second quarter of 2005. "We are extremely pleased to report record revenue, record pro forma earnings and continued positive cash flows from operations this quarter," stated Robert Van Buskirk, president and chief executive officer of Sirenza Microdevices. "Our more than 100% increase in pro forma profit on revenue growth of 87% clearly demonstrates the continued earnings leverage in our business. We have made substantial progress in the integration of Premier Devices and both our PDI and SMDI business segments delivered increased revenues in our second quarter. We currently expect continued growth in our business in the second half of this year as we capitalize on our current momentum and leverage our diversified, global business platform. In our earnings teleconference today, we will outline our current third quarter outlook and our increased outlook for our full fiscal year." Link to full press release: 7/26/2006 05:14:00 PM
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XM's Poison Pill
 July 26, 2006 Whether you feel that the speculation surrounding an XM buy-out or merger is real or a pipe dream, we thought it would be good for investors to understand some of the potentials involved. Below is the "XM Poison Pill" or "Stockholder Rights Plan". Whether it would be implemented or not is certainly up for speculation, but the plan does exist, and could be implemented if XM chose to do so. XM Satellite Radio Holdings Inc. Board Adopts Stockholder Rights Plan Washington, DC - August 2, 2002--XM Satellite Radio Holdings Inc. (NASDAQ: "XMSR") announced today that its Board of Directors has adopted a Stockholder Rights Plan in which preferred stock purchase rights will be granted as a dividend at the rate of one right for each share of Common Stock held of record as of the close of business on August 15, 2002.The Rights Plan, which is similar to plans adopted by more than 2,300 publicly-traded companies, is designed to deter coercive or unfair takeover tactics. The Rights Plan will assist the Company's Board of Directors in dealing with any future actions taken by hostile entities that attempt to deprive the Company and its stockholders of the opportunity to obtain the most attractive price for their shares.In implementing the Rights Plan, the Board has declared a dividend of one right for each outstanding share of XM Satellite Radio Holdings Inc. Class A Common Stock, Series A Preferred Stock and Series C Preferred Stock (on an as-convertedbasis). Each right initially would entitle the holder thereof to purchase one-one thousandth of a share of Preferred Stock. One-one thousandth of a share of Preferred Stock is intended to be approximately the economic equivalent of one share of Common Stock. The rights will expire on August 2, 2012.Initially, the rights are represented by the Company's Class A Common Stock certificates and are not exercisable. The rights will be exercisable only if a person or group in the future becomes the beneficial owner of 15% or more of XM's Class A Common Stock or commences, or publicly announces an intention to commence, a tender or exchange offer which would result in its ownership of 15% or more of the Class A Common Stock. The Rights Plan grandfathers Hughes Electronics and General Motors, as such stockholders' existing ownership positions are each in excess of the 15% ownership threshold above. The exercise price is $50.00. Ten days after a public announcement that a person or group has become the beneficial owner of 15% or more of the Class A Common Stock, all holders of rights, other than the acquiring person or group, would be entitled to purchase Class A Common Stock of the Company upon the payment of the exercise price at one-half of the then-current market price. If the Company is acquired in a merger, or 50% or more of the Company's assets are sold in one or more related transactions, each right would entitle the holder thereof to purchase common stock of the acquiring company at half of the then-current market price of such common stock. At any time after a person or group becomes the beneficial owner of 15% or more of the Class A Common Stock, XM's Board of Directors may exchange one share of Class A Common Stock for each right, other than rights held by the acquiring person or group. The Board generally may redeem the rights at any time until ten days following the public announcement that a person or group has acquired beneficial ownership of 15% or more of the outstanding Class A Common Stock. The redemption price is $0.005 per right.Details of the Rights Plan will be mailed to all stockholders of the Company. 7/26/2006 04:05:00 PM
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CNNMoney.com Comments on XMSR As A Takeover Target
CNNMoney.com XM's fading signal sparks takeover talk (link to article: HERE)Wednesday July 26, 2:06 pm ET By Paul R. La Monica, CNNMoney.com senior writer XM Satellite Radio has crashed and burned and now some are starting to wonder if the company could be a takeover target. Shares have plummeted more than 60 percent this year. Tough competition from rival Sirius Satellite Radio, which now employs shock jock Howard Stern, appears to be taking a toll. XM lowered its year-end subscriber and revenue forecasts in May. Analysts are also worried about increased advertising and promotional expenses as XM tries to stay ahead of Sirius. The company is also facing regulatory headaches. The Federal Trade Commission is investigating marketing practices. And in May, the company halted the sales of two models of radios that emit signals over standard FM frequencies because the Federal Communications Commission said they did not meet transmission standards. The hiring of a new president and chief operating officer on Monday hasn't eased Wall Street's concerns just yet either. Shares have fallen 6 percent so far this week as investors nervously prepare for the release of XM's second-quarter financial results. XM will report its numbers on Thursday and analysts expect sales of $221.6 million and a loss of 66 cents a share. So could XM soon find itself acquired? After all, the stock is now trading at its lowest point since August 2003 and with a market value of about $2.7 billion, the company could conceivably be absorbed by Sirius, which is valued at $5.5 billion, or one of the two largest terrestrial radio firms, Clear Channel Communications or CBS. There have been sporadic rumors during the past year about XM being a target of each of these companies. In fact, Sirius chief executive officer Mel Karmazin said at a media conference in June that he would love to buy XM at the right price. However, he said he wasn't sure a deal would be approved by government agencies. Analysts agree, saying that Karmazin's comments about a Sirius-XM merger are probably just a pipe dream for now. Chad Bartley, an analyst with Pacific Crest Securities, points out that the Justice Department and FCC blocked a proposed merger between satellite TV firms DirecTV and EchoStar in 2002. Based on that precedent, Bartley said it's highly doubtful that the government would look favorably on a deal between the only two satellite radio companies. XM currently has 6.9 million subscribers while Sirius has 4.7 million. But David Bank, an analyst with RBC Capital Markets, said that an eventual merger between the two can't be ruled out. As more and more technologies emerge, such as digital radio and streams of music over cell phones, it may be easier for the two companies to argue that a Sirius-XM combination would not crush competition. "I don't think a merger is viable at this point given the business concentration issues," Bank said. "But in three or four years you maybe could see a deal happening." So what about the traditional radio firms? Big radio is struggling to hold onto listeners and is faced with sluggish ad sales growth. A steady stream of subscriber fees could help reignite growth. "As people become more comfortable with the longer-term trajectory of satellite radio then XM could ultimately be attractive to outside investors," said Stuart Kagel, an analyst with Janco Partners. "A lot of larger media companies are bereft of high return on investment opportunities and satellite radio could be one." Clear Channel, the nation's largest radio firm does own 8.3 million shares of XM, about a 3 percent stake, and also programs some of XM's music channels. But relations between the two companies have taken a sour turn lately. Clear Channel and XM feuded over whether or not XM should air ads on the stations Clear Channel programs. Commercial-free music has been a main selling point for XM so the company resisted ads. But in March, an arbitration panel ruled in favor of Clear Channel, forcing XM to air commercials. The business arrangement between Clear Channel and XM is set to expire in 2008 and Clear Channel already has an agreement to sell its XM stake to Bear Stearns in that year as well. So it seems unlikely that Clear Channel and XM would kiss and make up and forge a larger deal. That leaves CBS. The company has recently inked a program-sharing deal with XM and that has led to increased chatter about a deeper partnership between the two firms. In April, some CBS stations began airing shortened versions of XM's "Opie & Anthony" show. That's a significant move for CBS since the two radio hosts were fired by CBS's radio business (then known as Infinity) in 2002 after they broadcast a couple having sex in New York's St. Patrick's Cathedral. A CBS-XM deal would be juicy since Karmazin and Stern both used to work for CBS. And Stern has not hidden his dislike of CBS CEO Les Moonves. So having Moonves and CBS suddenly become Sirius' top competitor does make for a great battle of egos. However, analysts don't believe the CBS-XM hype that much either. Although XM is getting along better with CBS than Clear Channel right now, Bank said that it would be difficult for CBS, even with its market value of $20.7 billion, to justify a deal since it would hurt CBS's profits for the foreseeable future. Analysts don't expect XM to report positive cash flow on an annual basis until 2008. "I don't really see XM as a viable target for one of the larger radio companies," Bank said. "The dilution would be substantial and I don't think they could withstand it." Bartley adds that buying a satellite radio firm would put Clear Channel or CBS in the uncomfortable position of having to explain why listeners should now have to pay for radio broadcasts. "Strategically, I don't think it fits. It would be a marketing 180 and counter to their view that radio should be free," he said. So XM investors are in a difficult situation. Few deny the long-term growth prospects for satellite radio as more and more automakers begin to install units in their cars. But for the short-term, increased competition, rising costs and regulatory concerns all paint a gloomy picture for XM. Legitimate takeover chatter might be the only thing to spark any interest and so far, all the talk is merely idle speculation. "XM is a momentum stock without a whole lot of momentum right now," Bank said. 7/26/2006 02:38:00 PM
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Sirius Q2 Outlook
 July 26, 2006 Sirius will be having their conference call August 1, 2006 at 8:00 AM. SSG would like to outline the street expectations as well as some possible items to watch for. Please remember that these are opinions. LOSS
The loss expected currently by the street is 15 cents. The opinions of analysts range from a 13 cent loss upwards to a 19 cent loss. Sirius lost 13 cents last year.
We here at SSG were actually surprised that the 15 cent expectation has held. When Sirius announced subscriber numbers significantly higher than expectations, there should have been some impact on the financial metrics. Subscriber additions all have SAC associated with them, and in particular, the OEM subscribers tend to be more expensive. We are expecting a bigger OEM contribution to the subscriber base than in previous quarters, and thus the metrics should have revised upward perhaps to the 16 cent range. To date only a few analysts have taken this into consideration and issued reports subsequent to the subscriber announcements. We are expecting Sirius to come in at a loss of 15 cents per share, and feel that the possibility of 14 cents is far more likely than 16 cents.
A wild card here is capital expenditures. Sirius had budgeted $110,000,000 in capex for 2006, but has not given a breakdown of when that money will be spent. If capex expenditures were more weighted in this quarter, then expect that to impact the loss accordingly. We feel that capex expenditures in Q2 and Q3 will outweigh that spent in Q1 and Q4. REVENUE
The street is anticipating revenue of 146.7 million dollars with ranges between 140 million and 154 million.
We here at SSG feel that the street is not taking into account enough impact from advertising revenue and that Sirius will beat the streets expectations on this metric. Sirius announced at the Q1 conference call that they advertising revenue was booking quite well, and that they were guiding to ad revenue representing 10% of all revenue by the end of the year. Given Sirius’ tendency to beat such guidance, we feel that there are many not taking this into account. We are expecting to see revenue top street expectations slightly.
SUBSCRIBER BREAKDOWNSirius has already announced NET subscriber additions of over 600,000 for the second quarter. We expect that for the first time that the OEM channel MAY represent more additions than the retail channel. In our opinion the OEM channel will represent between 49% and 53% of the quarters subscribers. This effect is happening because the Sirius has a large number of 1 year OEM subscribers, and the ramp up of OEM installs was not as substantial last year as this year. From this quarter forward the OEM churns will begin to represent a bigger piece of the overall churn pie.
Sirius performed strongly at retail in the quarter. The retail additions for the quarter will prove this out. At this point there is still a strong demand for Sirius in the retail channel.
We had believed that there was a chance that Sirius would raise subscriber guidance at the call, and believe this is still possible, but less likely given the f the FCC’s requirements for FM modulated units. Should the FCC change the testing requirements, it is possible that Sirius and XM would have to once again recertify these radios. At this point Sirius has already reiterated their guidance of 6.2 million subscribers by years end.
Sirius, it appears, will have room to raise guidance in the OEM channel. The last guidance offered by Sirius in the OEM arena promised about 826,000 NET additions for 2006. Sirius will already be over 500,000 with this quarters announcement. This leaves a lot of upward room for Sirius. If the FCC issue is resolved and there are no hic-ups in the supply chain, Sirius may be able to raise guidance.
SACWatch for SAC costs to come in near expectations, but to be slightly higher than last quarter. This will be in part due to a much more substantial OEM ramp up than people are expecting, and as discussed earlier, the SAC for an OEM subscriber is greater than that of a retail subscriber.
Watch for Sirius to maintain the SAC guidance for all of 2006. If an improvement in guidance in SAC is to come, it would likely come at the Q3 call.
CHURN
Sirius has guided that churn will be at 1.8% for the year. For Q2 Sirius should be in the 1.8 to 1.9% range. Sirius will likely keep their 1.8% churn guidance in tact. It is important to note that the reported churn rates of Sirius and XM can not be directly compared. Sirius reports a “fully loaded” churn number that includes OEM promotional drop-offs. XM does not include OEM promotional drop-offs in their number.
Sirius may add some flavor to the OEM take rate, but we do not find it a likely event in this quarter. They are asked the question each quarter, and to date have indicated that they are comfortable with analysts using XM’s take rate in their assumptions. This is another case, in our opinion, of Mel Karmazin being very comfortable with that guidance because they are likely to beat it.
OVERALLOverall, watch for Sirius to focus on the financial metrics of the company, and to outline how Sirius will reach CFBE. Sirius will likely discuss hardware, and the release of their new Stiletto, as well as some other hardware tid-bits. Watch for analysts to ask about the FCC issue, and for Sirius to offer an update to that issue. Watch for analysts to speak about WIFI as well as “on-line only” subscription models. Sirius will also likely add some new flavor in the OEM sector.
Street reaction to the call will likely be positive, and could be very positive if some concrete dates for anticipated events and launches are given. Investors in this equity should watch the rest of this week with caution. XM Satellite has seen some shake-ups, and their call is scheduled for July 27, 2006. Many are expecting some lowered guidance on the part of XM, and bad news for XM has had a tendency of impacting the sector as a whole. 7/26/2006 01:37:00 PM
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XMSR: Is There An Opportunity Going Into Earnings?
XMSR is scheduled to report earnings tomorrow morning. Over the past few months, almost anything that could go wrong did, and the stock price has responded accordingly, hitting 52 week lows on an almost daily basis. Analysts are expecting the worst, and therein lies the opportunity. Sentiment is overwhelmingly negative; however, if management is able to offer credible explanations and reasonable guidance going forward, perhaps investors will be forgiving. After all, satellite radio is one of the true consumer growth opportunities of the decade. Here's what management has to cover on the conference call: 1. Explain management changes...what does this accomplish? 2. Discuss Q2 subscriber disappointment...what happened? 3. Update on FM modulator issues with FCC...what's the timing? 4. Update on RIAA, expected outcome 5. Marketing department shake up...discuss new direction 5. Future guidance, subs, churn, costs, etc. 6. Partnerships 7. New hardware 8. Sales of wearable devices, how are they going? 9. Opie & Anthony, what's the business deal? 1o. Guidance for CFBE...is it still 2007? If these issues are addressed proactively, perhaps the investment community will forgive and forget! 7/26/2006 12:20:00 PM
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