Analysts Weigh In On NPD
August 29, 2006
With the release of the NPD data, some analysts have already given opinions:Stifel Nicholas (Kit Spring) Excerpts"Sirius maintained its leading market share in July and overall retail sales
growth improved sequentially: According to our proprietary analysis of retail sales data we purchase from NPD Techworld, total retail sales were up 3% in July. This pace represents a sequential improvement from 0% y/y growth in June- the first time this year that growth has improved month/month, despite FCC emissions standards issues that likely negatively impacted the availability of
certain XM and Sirius radios. The market-share split was 58%/42% SIRI/XMSR,
roughly in line with the share-split over the past 6 months. We view these
results positively but note that July is not the biggest month in terms of
retail sales in the 3Q, and in the past has represented about 30% of 3Q sales.
SIRI's retail pace improved significantly during the month: This was Sirius'
best month in terms of y/y growth since March......."The Kit Spring analysys was pretty straight forward and based on the numbers.Bank Of America (Jonathan Jacoby) Excerpts:July NPD Data: Slow Retail Growth Continues for Sat Radio
July satellite radio sales data from NPD shows continued slow growth at retail.
Unit sales for the industry grew 2% YoY in July, slightly better than the flat
industry sales posted in June. Sirius' (SIRI, $4.06, Neutral, Target Price:
$4.00) share was 58%, down slightly from 61% in June.......
......XM's unit growth was down sharply YoY (29%), likely reflecting product
shortages. XM (XMSR, $12.75, Buy, Target Price: $19.00) briefly resumed
shipments of 'plug & play' radios (which account for ~70% of retail unit sales)
in late June, but was forced to stop shipping again in July as the modified
units still failed to pass FCC emission tests. XM received new radio IDs again
last week, and shipments should resume by the end of September. However, lack
of available product in certain areas likely will lead to lower market share
and YoY sales decline in 3Q......
Jacoby runs by the numbers, but also has some curious comments. He states that retail growth is slow, but the numbers clearly show that SDARS sales are up 26% year to date, and 3% in July. He does not really identify that Sirius is seeing very healthy growth, and XM is seeing negative numbers in this area.
Morgan Stanley (Benjamin Swinburne) Excerpts
Quick Comment: NPD data released this afternoon for July are broadly
consistent of our 3Q06E growth and share assumptions for both XMSR and SIRI.
Category sales grew 2.5% and SIRI reached a 58% market share advantage over
XMSR, both broadly in line with our estimates for 3Q06 (~ -1.5% decline YoY in
category retail gross adds and SIRI taking 57% share). July's near 45%
sequential decline from June primarily reflects the June impact of Father's
Day and graduation gifts, although the drop in July may have been exacerbated
by inventory disruptions from XMSR relating to FCC compliance issues on its FM
modulators. Both XM and SIRI appear to have put these issues broadly behind
them, and we do not expect any inventory disruption for the important 4Q06E
What's New: July NPD results display SIRI's continued ~58% retail market share
advantage over XMSR, broadly in line with 2Q share of ~57%, but down slightly
from June's 60% advantage. According to the released data, SIRI retail sales
grew 52% from July '05 compared to -29% at XMSR. In comparison to June's -18%
YoY sales declines, XMSR's results continue to display a loss of momentum in
the retail channel. Despite difficult YoY category comparisons from XMSR, we
are somewhat encouraged by the 2.5% YoY total category growth seen in July
compared to roughly flat YoY growth in June.
Swinburne reported by the numbers, and outlined his opinions. He sees the sector growing at retail.
8/29/2006 08:57:00 PM
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