Thursday, October 05, 2006
BusinessWeek Comments On Q3 Subscribers
October 5, 2006
Investors Tune Out of Radio StocksAnalysts raise concerns about growth targets for XM Satellite and Sirius Satellite after they release third-quarter subscriber numbers
Shares of XM Satellite Radio (
XMSR ) and Sirius Satellite Radio (
SIRI ) faced static from investors on Oct. 4 after both radio companies released third quarter subscriber numbers. A few analysts raised concerns about whether the companies can meet their subscriber targets for the year. XM Satellite says it added 285,000 new net subscribers during the third quarter, for a total of more than 7.185 million subscribers. This fell short of analysts' forecast of 337,000 new subscribers. The Washington, D.C.-based company still projects that it will end the year with total subscribers between 7.7 million and 8.2 million. "Despite highly cautious third-quarter projections, adversely affected by the now-concluded FCC probe, we think final tally fell well short," says Standard & Poor's equity analyst Tuna Amobi in a research note. (S&P, like BusinessWeek.com, is a unit of The McGraw-Hill Companies.) Amobi believes that XM Satellite's 2006 yearend guidance for 7.7 million to 8.2 million total subscribers reflects optimism about resumed shipments of plug-and-play radios and holiday sales of the new Inno and Helix portable players. "However, after what we see as a lackluster first half, we would not be surprised by another downward revision in full 2006 targets during the company's upcoming third-quarter call," he warns. Separately, XM Satellite said George W. Haywood, a member of its board, has resigned. Back in February, another director resigned amid concerns about the company's growth strategy (see BusinessWeek.com, 2/17/06,
"Static at XM Satellite Radio"). ...read more:
here10/05/2006 07:51:00 AM
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