Thursday, November 09, 2006
BusinessWeek Comments On Sirius Earnings
Stocks in the News November 8, 2006, 10:24AM EST, BusinessWeek
Sirius: Investors Tune In as Losses EaseShares gained Wednesday after the satellite radio outfit reported healthy growth in new subscribers -- and lower costs to acquire them
Sirius Satellite Radio (
SIRI) said Nov. 8 that it lost less money during the third quarter, as it reins in the cost of adding its droves of new subscribers.
The New York company reported a net loss of $162.9 million, or 12 cents per share, for the third quarter of 2006. That's an improvement from a net loss of $180.4 million, or 14 cents per share, for the third quarter of 2005. The mean analyst estimate had been for a loss of 14 cents per share during the recent quarter, according to the San Francisco research firm StarMine.
The company also affirmed key financial targets: 3 million total subscribers by the end of 2006, and $1 billion of of free cash flow by 2010 on $3 billion in revenues. The company held out the possibility of positive free cash flow in the 2006 fourth quarter.
In January, Sirius hired radio personality Howard Stern, in the hopes of adding the shock jock's millions of listeners to its subscriber base. The gambit appears to have helped, as the company has brought total subscribers to 5,119,308 at the end of the third quarter, up 135% from a year earlier. The company added 441,101 subscribers during the 2006 third quarter.
Those new subscribers did come at a price. As Sirius shipped more radios to new customers, subscriber acquisition costs rose to $80.9 million during the quarter, a 17.8% increase from $68.7 million. But the company managed to offset that disadvantage by slashing other costs, such as those related to manufacturing. Sirius spent $114 to add each new subscriber, or 23% less than the $149 it had spent during the three months ended Sept. 30 2005...read more:
here11/09/2006 10:26:00 AM
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