Tuesday, February 27, 2007

SIRI: Analyst Comments Begin To Roll In


Sirius Satellite: Color on qtr (3.74 ) -Update-
Amtech notes that SIRI subscriber additions of 905k were pre-announced on Jan. 5th. They note that financial results were better than expected, with revenue of $193 mln better than consensus of $175 mln and EBITDA loss of ($167 mln) was better than consensus of ($217 mln). They note that mgmt expects to add around 2 mln new subscriber, roughly inline expectations of around 2.1 mln. They say revenue is expected to approach $1 bln, a touch lower than consensus of $1.014 bln. Churn is expected to be 2.2% to 2.4%. While unclear, they believe consensus was around 2.1%. Firm says mgmt is not providing P&L guidance "in light of the pending merger with XM, and the uncertainty surrounding the timing and financial impact". With expected close around year-end, they think management is being evasive. Firm thinks XMSR's subscriber guidance was relatively inline, but EBITDA loss was significantly lower as they expect higher spending to stimulate demand.


Sirius Satellite Radio (SIRI) Maintains 3 STARS (hold) Analyst: Tuna Amobi, CPA, CFA After pre-announced net subscriber additions of 905,000, Sirius posted a fourth quarter loss per share of 17 cents vs. a 23-cent loss one year earlier, 3 cents and 2 cents narrower than S&P and Street views. Except for churn and retail slowdown, we see improving metrics, including subscriber acquisition costs, average revenue per user and auto OEM gains. Sirius guides, in our view, cautious 2007 2 million net adds, with $1 billion total revenues (vs. 2006's $637 million), 2.2%-2.4% churn (vs. 1.9%) and $95 acquisition cost per subscriber (vs. $114). We are cautious on regulatory outlook for pending merger with XM Satellite Radio (XMSR) and are keeping our target price of $4.50 on relative enterprise value/sales.

2/27/2007 09:16:00 AM

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