Investor News – SiriusBuzz http://siriusbuzz.com All Things SiriusXM Satellite Radio Thu, 19 Nov 2015 23:01:03 +0000 en-US hourly 1 SiriusXM Announces Additional $2 Billion In Stock Buyback http://siriusbuzz.com/siriusxm-announces-additional-2-billion-in-stock-buyback.php http://siriusbuzz.com/siriusxm-announces-additional-2-billion-in-stock-buyback.php#comments Thu, 27 Aug 2015 16:35:52 +0000 http://siriusbuzz.com/?p=21192 → Read More]]> money-dollar-signSiriusXM, the company that has already bought back billions of dollars of its own stock, announced that its Board of Directors has approved an additional $2 billion of common stock repurchases.  The SiriusXM mantra of returning value to shareholders in the form of buying its own stock will continue into the foreseeable future.  Shares of common stock may be purchased from time to time on the open market and in privately negotiated transactions, including in accelerated stock repurchase transactions and transactions with Liberty Media and its affiliates.  The Company will fund the repurchases through cash on hand, future cash flow from operations and future borrowings

Since 2012 the stock repurchase program (inclusive of this latest announcement) will be an impressive $8 billion.  This program is now getting to the point where these share buybacks are becoming more and more meaningful to shareholders.  Essentially, the supply of stock was once massive.  Limiting that supply can be a big boost to driving shareholder value.  Over the past couple of years the program has been great at creating price stability and a good foundation to support the stock.

Liberty Media and its affiliates control about 60% of the SiriusXM shares.  If Liberty does not sell any stock, the percentage of Liberty ownership will increase.  There is potential, in the months ahead, that Liberty renews a possible effort to buy out remaining stock.  This could prove lucrative for shareholders that play SiriusXM and Liberty stock.

The bottom line is that there is now another $2 billion committed to support the stock.  This is a luxury that many companies do not have.  Essentially SiriusXM feels that the stock is undervalued, and buying its own stock is a good method to help correct that situation.  Stay Tuned!

 

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SiriusXM Posts Good Quarter – Ups Guidance http://siriusbuzz.com/siriusxm-posts-good-quarter-ups-guidance.php http://siriusbuzz.com/siriusxm-posts-good-quarter-ups-guidance.php#comments Wed, 29 Jul 2015 14:04:54 +0000 http://siriusbuzz.com/?p=21187 → Read More]]> money-cash-up-arrow-lineThe big news with SiriusXM's Q2 was not that they hit the analysts targets, but rather what the future holds in store.  The company reported a profit of 2 cents per share on revenue of $1.12 billion and a profit of $102.8 million.  SiriusXM raised its subscriber guidance from 1.4 million additions this year to 1.8 million.  The company also raised its revenue forecast to $4.5 billion.  Highlights of the quarter included:

  • Self-pay Net Additions Increase 37% to 519,000
  • Record Second Quarter Revenue up 8% to $1.12 Billion
  • Net Income of $103 Million, Including a Pre-tax $108 Million Settlement
  • Adjusted EBITDA Climbs 12% to a Record $415 Million
  • Free Cash Flow Reaches $371 Million, up 11%
  • GAAP EPS of $0.02; Adjusted EPS of $0.03, Excluding Settlement

It is also notable that SiriusXM repurchased 144 million of its own shares during the quarter for $560 million.  The company improved its churn to 1.6%, which would seem to indicate that the product remains sticky.  The success in converting trial subscriptions to self paying subscriptions was about 41%, in line with recent quarters.  The company reports an average revenue per user per month at $12.42. and a subscriber acquisition cost of just $32.  This implies that the company can break even on a subscriber after just 2.5 months.

SiriusXM stock now trades in the $4 range and seems to be getting upgrades from the street.

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SiriusXM Settles Royalty Lawsuit For $210 Million http://siriusbuzz.com/siriusxm-settles-royalty-lawsuit-for-210-million.php http://siriusbuzz.com/siriusxm-settles-royalty-lawsuit-for-210-million.php#comments Mon, 29 Jun 2015 12:52:59 +0000 http://siriusbuzz.com/?p=21178 → Read More]]> gavel.jpgFresh off of what could only be considered a legal victory in Florida, SiriusXM Satellite Radio made a decision to settle a lawsuit regarding royalties of pre-1972 music.  The company announced Friday that it was had reached a settlement on the issue and will pay $210 million.  SiriusXM gets to use pre-1972 recordings without any additional payment through the end of 2017, and can then negotiate with parties regarding use of the recordings through 2022.

The suit originated from Flo and Eddie of the Turtles, which brought the case on behalf of themselves, and eventually sought and gained class action status.  The Turtles are most famous for their song "Happy Together".  Current royalty law only covers recordings after 1972.  SiriusXM does have a few direct deals negotiated with various parties regarding pre-1972 music.  An example is the Elvis Channel on SiriusXM.

While the settlement is expensive, a cloud over the head of SiriusXM has been removed.  The settlements may also pave the way for other settlements with companies like Pandora.  SiriusXM is a highly profitable company, and should be able to absorb the settlement without much impact on the stock price.  Stay Tuned!

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SiriusXM Scores Court Victory In Pre-1972 Recordings http://siriusbuzz.com/siriusxm-scores-court-victory-in-pre-1972-recordings.php http://siriusbuzz.com/siriusxm-scores-court-victory-in-pre-1972-recordings.php#respond Wed, 24 Jun 2015 19:33:07 +0000 http://siriusbuzz.com/?p=21173 → Read More]]> 12-8 turtlesThe issue surrounding royalties for songs recorded before 1972 has not typically been a friendly one to SiriusXM.  The satellite radio provider has found itself on the losing side of an argument about the payment of royalties for music fitting into that category.  The issue arises because the royalty laws used to pay artists took effect in 1972, leaving a debated loophole of music that predates the law.

Flo and Eddie, from the Turtles, and famous for the song Happy Together filed suit in California for unauthorized use of their material, and are working their way across several states with similar suits.  The suit has even gained class action status in California.  This past week, SiriusXM actually scored a victory in the state of Florida.  The judge there sided with SiriusXM, stating that if he were to agree to the arguments of Flo and Eddie, that the court would be creating a new property right, as opposed to interpreting the law.

Regardless of the legal wranglings, it is clear that legislation around royalty rights and royalty rates needs to be addressed sooner rather than later.  SiriusXM has found itself in near constant struggles regarding the subject of royalties for the better part of a decade.

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Judge Certifies Class Action Suit For Pre-1972 Recordings http://siriusbuzz.com/judge-certifies-class-action-suit-for-pre-1972-recordings.php http://siriusbuzz.com/judge-certifies-class-action-suit-for-pre-1972-recordings.php#comments Thu, 28 May 2015 13:06:05 +0000 http://siriusbuzz.com/?p=21170 → Read More]]> new-gavelSiriusXM has seen better days.  The satellite radio provider was dealt a bit of a blow this week when a federal judge certified that the Flo and Eddie lawsuit regarding royalties would garner class action status.  Instead of Flo and Eddie against SiriusXM, it can now be anyone with pre-1972 music vs. SiriusXM.  The suit could carry ramifications across the digital sphere.

Judge Philip Gutierrez sided with Flo and Eddie on the matter, and seems to have agreed that the damages proposed, 100% of all revenues attributed to pre-1972 recordings are at play.  It is estimated that somewhere between 5% and 10% of  SiriusXM's revenue stream could be impacted.  With billions of dollars in revenue, the numbers are quite substantial.  Essentially, between $50 million and $100 million of each billion in revenue is on the table.  The suit goes back to August of 2009.  Sound exchange estimates that between 10% and 15% of SiriusXM's revenue is tied to pre-1972 recordings.  Either way, the numbers can grow substantially .  SiriusXM has reported roughly $20 billion in revenue since 2009.  Using a 10% figure, the exposure could be as high as $2 billion.

As class action suits go, this one can be quite scary because there is an extensive record of what songs have been played.  SiriusXM defense is to somehow demonstrate that the revenue from the play of such songs is as low as possible, because there is no real way the company can say it did not benefit from airing the music.  Stay Tuned

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SiriusXM Misses On Earnings But Raises Guidance http://siriusbuzz.com/siriusxm-misses-on-earnings-but-raises-guidance.php http://siriusbuzz.com/siriusxm-misses-on-earnings-but-raises-guidance.php#comments Wed, 29 Apr 2015 13:59:52 +0000 http://siriusbuzz.com/?p=21143 → Read More]]> quarterly resultsSiriusXM (SIRI) reported Q1 earnings yesterday and the results were somewhat of a mixed bag.  The company reported a profit of 2 cents per share but missed analysts estimates of a 3 cent profit.  While the news of a miss may not be positive, there were many aspects of the quarter that were quite positive in nature.

  • The company reported revenue of $1.08 billion, an increase of 8%.
  • The company reported Net Income of $106 million, a 12% increase
  • The company reported a 19% spike in adjusted EBITDA to $399 million
  • Free Cash Flow was up 24% to  $276 million

In addition the company, on the heels of adding 431,000 subscribers, raised its subscriber guidance for 2015 to 1.4 million.  More impressively, the revenue guidance was also raised and now is estimated to be $4.47 billion.  SiriusXM expects adjusted EBITDA for the year to be $1.6 billion and Free Cash Flow to be $1.25 billion.

Subscriber metrics were pretty stable with self-pay churn at about 1.8%.  There is some concern in the continued drops in conversion rate, which was 40% last quarter.  The conversion rate reflects the ability of the company to covert trial subscriptions to self-paying.  This past quarter reported the lowest conversion rate to date.  The metric could be an indication that more connected and capable cars are giving consumers other options in audio entertainment.  A drop in this metric could be an indication that the price of the service is not as elastic (the ability to raise rates) as one might like to see.  That being said, the Average Revenue per User saw a slight increase to $12.26 per month.  This combined with lower Subscriber Acquisition Costs, which were down to $33 could help offset any concerns about the conversion rate.  Another positive metric was that 71% of new vehicles are being equipped with satellite radios.  This could also be an impact on the conversion rate for various reasons.  Like it or not, not every car is a good partner for satellite radio.

SiriusXM is not resting on the technology and offering front.  The company is beginning a new initiative called SXM 17 which will utilize satellite as well as LTE coverage to increase offerings and remain competitive.  SXM 17 is the next generation in the SiriusXM offering.

SiriusXM also has continued with its share buyback program.  In Q1 of 2015 the company bought back 144 million of its own shares for $534 million.  This type of action helps to keep the price of the equity stable.  At some point share buybacks can also lead to share appreciation.  In the first few weeks of April the company bought another 36 million shares bringing the year to date total to about 180 million.  All told, the company has removed about 20% of the shares from the market since the inception of the share buyback program.

As you can see, the EPS miss is not the big news here.  The company is executing on all fronts, controlling costs, and returning equity to shareholders.  SiriusXM may not be as sexy as it once was, but is is definitely established and is on course to be vary stable in the years ahead.  SXM 17 is an initiative that seems to be pretty interesting.  Stay Tuned for more detail on that.

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Jaguar and Land Rover Expand Deal With SiriusXM http://siriusbuzz.com/jaguar-and-land-rover-expand-deal-with-siriusxm.php http://siriusbuzz.com/jaguar-and-land-rover-expand-deal-with-siriusxm.php#comments Mon, 06 Apr 2015 20:26:48 +0000 http://siriusbuzz.com/?p=21110 → Read More]]> Jaguar Land RoverJaguar Land Rover North America and SiriusXM have announced Jaguar Land Rover has selected Sirius XM Connected Vehicle Services Inc., a subsidiary of SiriusXM, to provide call center support for safety and security services to vehicle occupants using its Jaguar InControl® and Land Rover InControl® infotainment systems.

The Jaguar and Land Rover InControl suite of technologies provides vehicle owners with an array of advanced driver assistance systems including emergency response contact as part of the available InControl Remote & Protect™ system. SiriusXM will provide Jaguar and Land Rover vehicle owners with support for personal safety and security services, including:

  • Automatic Crash Notification (ACN): Automatically signals a SiriusXM Response Specialist to assist the vehicle’s occupant with notifying emergency responders in the event of an accident, provide the vehicle’s location, and communicate with the vehicle’s occupant until help arrives.
  • SOS/E-Call: Gives the vehicle’s occupant the ability to contact a SiriusXM Response Specialist via an in-vehicle S.O.S. button during an emergency.

Jaguar Land Rover is expected to introduce InControl™ to the U.S. market beginning with the delivery of select 2016 model year vehicles.  Owners will receive a 4-year subscription to SiriusXM supported safety and security services when purchasing any 2016 model year vehicle equipped with InControl Remote & Protect™.

This deal is yet another indication of the initiatives beyond satellite radio that SiriusXM is trying to develop, market, and expand.  SiriusXM has a desire to be a value to auto makers and provide a partnership rather than just a service.   This deal is not as big as the relationship with Nissan, but does show growth for SiriusXM in this area of its businesses.  In addition, these types of deals help to give a pathway for satellite radio to remain relevant and more sticky with consumers.

Jaguar sells about 16,000 cars a year in the U.S. market, and Land Rover about 52,000.

 

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March Auto Sales Mixed – Still Good For SiriusXM http://siriusbuzz.com/march-auto-sales-mixed-still-good-for-siriusxm.php http://siriusbuzz.com/march-auto-sales-mixed-still-good-for-siriusxm.php#respond Mon, 06 Apr 2015 12:25:08 +0000 http://siriusbuzz.com/?p=21095 → Read More]]> U.S. auto sales in March of 2015 were a bit of a mixed bag if you look at the headlines, but growth is still happening, sales are on a pace for 17 million, and SiriusXM remains in a good position to install a large amount of satellite radios into new vehicles.

4-6 auto sales

With Q1 sales complete, overall sales stand at 9.93 million.  March of 2015 was easily the largest volume month of the year with sales at 1.537 million, well above the 1.251 million we saw in February.  For the auto sector, year over year comparisons are getting challenging.  The trajectory of growth is not as steep as it once was, but growth is indeed happening.

Nearly half of the cars sold in March were from manufacturers offering trailing subscriptions to satellite radio.  This means that the free trial that comes with the vehicles is not counted in the subscriber number.  These radios will only be counted as subscribers if the consumer elects to keep the service.  Only 12% of the cars sold in March came with subscriptions that were counted at the point of sale, while about 39% were counted at the time of vehicle manufacture.

Analysts anticipate that 2015 can deliver 17 million in sales, up from 16.5 million in 2014.  Stay Tuned!

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SiriusXm Provides Foundation For Nissan’s Connected Car http://siriusbuzz.com/siriusxm-provides-foundation-for-nissans-connected-car.php http://siriusbuzz.com/siriusxm-provides-foundation-for-nissans-connected-car.php#respond Mon, 06 Apr 2015 12:07:57 +0000 http://siriusbuzz.com/?p=21092 → Read More]]> 4-6 maximaSiriusXM and Nissan have announced that Nissan will launch NissanConnect Services powered by SiriusXM, in select 2016 model year Nissan vehicles, starting with Maxima, its all-new flagship sedan.  The all-new telematics program is Nissan's first in-vehicle launch of SiriusXM's connected vehicle services and will feature vehicle security, vehicle health monitoring, remote access services, and more.

Presented with an extensive package of available services powered by SiriusXM, NissanConnect Services will be one of the most feature-rich suites of connected vehicle services available to drivers today.

"SiriusXM is thrilled to be Nissan's exclusive provider for this world-class suite of security, convenience, and remote features to match the driving needs of its customers," said Larry Pesce, Group Vice President and General Manager, Connected Vehicle and Infotainment, SiriusXM. "Offering the support drivers want and need on the road, along with the critically-acclaimed satellite radio they love, builds on our long relationship with Nissan and its customers."

Three levels of service provided by SiriusXM will debut on select 2016 model year Nissan vehicles, including:

  • NissanConnect Services: The base package will include Emergency Services including Automatic Collision Notification, Emergency Calling, and Stolen Vehicle Locator, as well as Maintenance Alerts such as Customized Messaging and Maintenance Reminders.
  • NissanConnect Services Premium: The mid-tier package includes all the features from the base package plus Remote Services including Remote Start and Remote Door Lock/Unlock, as well as Monitoring Alerts like Boundary Alert, Valet Alert and Curfew Alert.
  • NissanConnect Services Premium Plus: The top-tier package adds to the suite of services included in the base and premium packages by including a suite of Destination Services such as Assisted Search, Connected Search and Journey Planner.

Nissan has been one of the early adopters of the SiriusXM connected car services.  Other manufacturers, while offering some services from SiriusXM, have not made such a wide spread adoption of connected car options.  In concept, the Nissan program can become a showpiece for the advantages of utilizing SiriusXM for such services.

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SiriusXM Prices Offering For $1 Billion In Senior Notes http://siriusbuzz.com/siriusxm-prices-offering-for-1-billion-in-senior-notes.php http://siriusbuzz.com/siriusxm-prices-offering-for-1-billion-in-senior-notes.php#comments Fri, 06 Mar 2015 18:32:37 +0000 http://siriusbuzz.com/?p=21008 → Read More]]> money-dollar-signSiriusXM initially announced an offering of $750 million in senior notes to be due in 2025.  Within hours, the number grew to $1 billion in senior notes at an impressive 5.375% that would come due in 2025.  It could be that the appetite for these notes was such that the company saw the ability to raise the stakes a bit.

SiriusXM has been very good about debt over the last few years, and has been adept at maintaining a good debt to EBITDA ratio.  The company has massive revenues, and frankly, borrowing money at a bit over 5% is likely a very wise move.  SiriusXM has used such debt offerings to pay down higher debt and to buy back shares.  Last year the company spent $2.5 billion to buy back 739,000,000 shares.

SiriusXM currently carries about $4.5 billion in debt with most notes being due after 2020.  The company has carried a very disciplined approach to its debt as well as its share buyback program.  Some investors do not like the idea of debt, but smart debt can give a company like SiriusXM a great deal of operating latitude at a very reasonable cost.

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