CIBC - Q3 Preview

November 1, 2006

CIBC has issued their Q3 preview for Sirius and XM. The firm notes that a seasonaly weak Q3 marks the bottom for the sector.

The firms analysis for SIRI remains largely unchanged

The firm reduced EPS, EBITDA and FCF for XMSR

The firm expects that SIRI to report:

- Revenue of $171 million
- Expenses of $263 million
- A decline in SAC to $125 from $132 in Q2
- A decline in CPGA to $167 from $180 in Q2
- An EBITDA loss of $92 million
- An operating loss of $162 million
- An EPS loss of 12 cents per share vs. 14 cent consensus
- Free Cash Flow Loss of $15 million vs. Sirius guidance of possible CFBE
- Did not state year end subscriber guidance, but did use 6.3 million in analysis

The firm expects XM to report:

- Revenue of $240 million
- Expenses of $262 million
- SAC of $66
- CPGA of $110
- EBITDA loss of $29 million
- Operating loss of $84 million
- EPS loss of 41 cents per share vs. consensus of 46 cents
- Expects XM to end year with 7.9 million subscribers

The report is well detailed, and the thought process is easy to follow. The report does have a section that is harsh on Hugh Panero and Gary Parsons citing concerns over decisions made by the pair over the past year.

11/01/2006 11:58:00 AM

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