Wednesday, November 08, 2006
Bernstein Note On Sirius
November 8, 2006
Bernstein analyst Craig Moffett issued a brief note today after the Sirius Confernce Call. Here are some excerpts from the note:
"In addition to posting better-than-expected financial results, Sirius – gratifyingly – retained all prior guidance, including their all-important subscriber forecast of 6.3M year-end subscribers."
"As was the case with XMSR on Monday, the source of their financial outperformance (smaller loss) was lower-than-anticipated spending. Sirius’s EBITDA loss of $127M was fully 36% lower than our ($172M) forecast. But unlike XMSR, whose beat came from more restrained marketing – in the face of FCC compliance-related supply chain disruptions and normal seasonality – in the case of Sirius it was broader “cost control.” Satellite and transmission costs (down sharply sequentially), customer service costs, and even – importantly – programming costs, were all significantly lower than we had anticipated (equity granted to 3rd parties was also significantly better than we had expected). At the same time, ARPU ($11.17) was slightly better than expected, leading to a 1.3% revenue beat."
"The fact that they continue to expect positive free cash flow in Q4 further attests to the scalability of the platform, as well as to the appealing negative working capital requirement arising from customer pre-payments."
"We rate Sirius outperform, target $6. We continue to prefer XMSR (outperform, target $24), however, on the basis of more attractive relative valuation."
11/08/2006 04:40:00 PM
SSG Has Merged. You Can Read All Of The Latest SSG Content By Clicking Here
0 Comments:
SSG is not a Financial Advisor. Read Disclosure: HERE
--------------------------------------------------------
