Tom Watts of Cowen issued a report today on Sirius Satellite Radio. The analyst rates Sirius as Outperform.


Sirius Satellite Radio Outperform (1)

2008 Q1: In-Line Results.

Waiting for FCC.
SIRI's solid Q1 matched us on subs and ARPU, and beat on EBITDA, SAC and EPS. OEM net adds eclipsed retail adds for the 5th straight qtr, while overall net adds cont'd to gain share vs. XMSR (Outperform, $12.30) for the 10th straight qtr. We expect the FCC to issue an Order for Circulation proposing approval of the merger, but timing is still uncertain. XM's refi issue should beresolved via bondholder consent over the next few weeks. Maintain Outperform.

Another Solid Quarter. Revs of $270MM nearly matched our $273MMEand consensus of $276MM. In-line revs were driven by flat ARPU of $10.09 vs. our $10.10E and consensus of $10.25. EBITDA loss of ($40MM) vs our($57MM)E, reflected SIRI's cost controls in Programming, Billing, and Marketing. SAC of $91 beat ours and consensus' $95 by 4%. Higher churn of 2.7% came in slightly above our 2.5%.

OEM to Dominate Sub Growth. OEM net adds of 321K vs. our 256KE dominated total net adds of 323K, eclipsing for the 5th straight quarter,retail adds which produced only 2.5K new subs. We expect increasing penetration of factory installs to drive solid sub growth, providing good visibility on FCF.

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Position - Long Sirius, XM.