Friday, November 03, 2006

Morgan Joseph: XMSR Earnings Preview

Live In Play, www.briefing.com, 03-Nov-06, 08:37

XMSR XM Satellite: 3Q06 preview;

XMSR continues to struggle - Morgan Joseph (11.25 )
Morgan Joseph expects XMSR to report Nov 6, befroe the markets. Firm expects rev and EBITDA of $236.1 mln and ($50.3) mln. Firm's rev est represents 54.2% y/y growth. Firm also expects EPS of ($0.40), flat with 3Q05. Firm's forecasted 3Q06 SAC (subscriber acquisition cost) and CPGA (cost per gross addition) is $76.60 and $123.70, respectively, up significantly from $53.70 and $89.30 a year ago. Firn says in early Oct, XMSR announced that it added 285,000 net new subscribers in 3Q06 and ended the quarter with 7.185 mln total subscribers, well below firm's 401,000 and 7.301 mln ests. Firm expects the co to provide an update on Y06 guidance. Currently, firm ests Y06 year-end subscribers of 7.821 mln and Y07 year-end subscribers of 10.136 mln. Firm expects continued high churn and notes the retail channel remains weak. Firm also notes co signed a deal with Cingular Wireless to stream 25 XM music channels to its handsets as part of XM Radio Mobile for $8.99 per month.