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Thread: Financial Guidance at Meeting

  1. #11
    john is offline
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    homer, I thought SIRI had 82 million in the 4th Q of 2007. (Could have swore that was it, but went from memory so I will go with your number.) I believe that FCF number will be over 200 million (pro forma) just going from the prior years of both increasing FCF numbers in their 4th Q. (While XMSR did not do as well as SIRI last year, in their conference call XMSR said that; the cost of the satellite was the main reason, and that that kind of cost will not be there again for a long time and that number will increase greatly going forward.) Now we know that cost for both have been brought down over 2008, not as much as 2007 was and more so for SIRI then XMSR (until the merger). Just going from year over year increases in positive FCF number in the 4th Q is what brings me to my conclusion of at least 200 million.

  2. #12
    homer985 is offline
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    Joined: Mar 2008 Posts: 485
    John...

    Yes, XM had an extaordinary amount of extra items in Q4 last year that killed their cashflow... and I agree that cashflow should improve even more this year. However, there was a high number of contract buyouts and severence offered to employees let go.

    Sirius XM let go over 450 employees in the last 180 days -- severence to all of them will be expensive. IMHO, cashflow really won't improve as much as people think here in Q4... I expect to see more improvements next quarter -- and then a huge improvement to cashflow in Q2 next year as severence to those employees winds down.


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  3. #13
    john is offline
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    homer, You may be right. But I still think most were let go in the 3rd quarter and severence is given soon after letting them go. Now while many of the contract buyouts were in the 4th quarter. I still believe there were still more savings in the 4th quarter then cost. As an example look at the 100 million less in loss they just came up with. That all gos to the bottom line. Like I said I just think the savings in the 4th Q will well out weigh the cost. Even if it didn't, there is still the fact both would have had about 150 million in FCF last year if XMSR did not have all the extra cost they wont have this quarter. I also expext a jump like they had in FCF in 2007 over 2006, or at least half of that which would put it at about 25 million for SIRI at least. We will find out shortly though.

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