Sirius XM To Report Q2 Earnings Tomorrow
The good news over the weekend should translate to a nice run in Sirius XM Satellite Radio (NASDAQ:SIRI) stock. The company is set to report their Q2 earnings Tuesday, and given the number of cars that sold in the quarter we should see the company report decent numbers across the board. Combine that with an anticipated increase in guidance and the resolution to the debt ceiling issues, and there is a recipe for a nice run in the stock.
Last week I published my projections for where I think the company will be on Tuesday morning. The highlights include NET subscriber additions of about 460,000, increased subscriber and EBITDA guidance, and higher revenues. Look for Sirius XM to trade up simply based on the solution to the debt crisis and add an additional leg up on the merits of their operating performance for the second quarter. A new 52 week high over the next couple of weeks is not out of the question.
Position – Long Sirius XM Radio
what where last years net sub increase for the 2nd Q?
583,000 last year.
The problem is that churn is taking away more subs as the base grows. Gross additions will be slightly hioger than last year, but deactivations will be at almost 1.7 million vs. last years 1.4 million
I am surprised you are not factoring in the FCC decision on the price freeze lift. This is going to be the DRIVER of tomorrow’s CC. Mel will most likely address this. In my view, you are grossly underestimating what may transpire tomorrow provided the results are just decent.
V…..
The overhang on the price increase is the blessing case. With several objections filed, it will hamper Mel’s ability to give any real flavor in prices is now limited. Remember, the implications of the blessing suit deal with not only prices, but anti-trust. Mel spoke of price increases in the past to set up the settlement.now that the settlement is being called into question he needs to be careful.
I’m looking forward to earnings. And knowing you are pretty accurate in your forecasts than say, delusional pumper Brandon Matthews, I think we are in good shape. I read your complete Seeking Alpha article and you make some good points.
You converted an early skeptic to a fan Spencer!
Long Sirius. My target: $3 by Dec.
Thank you for the kind words
Spencer your estimates are usually on target, having said that I will add to my shares count today and hope for a nice pop tomorrow.
Does anybody worry that Sirius won’t be able to keep pace with past subscriber additions. What I mean is, they can’t maintain a 40% conversion rate forever. What is the saturation point of Sirius? And what are the prospects for growth after it hits it? Advertising? Price increases? On Satellite 2.0, I think the features will be cool, but it’s not a new product. It’s not like Apple inventing the iPad.
Anyhow, I long and strong, but pondering the prospects.
brad….
The conversion rate is not the real issue with the dynamic youv raise. The issue is that 2% churn equates to9 a bigger number of deactivations each quarter, and it takes a higher number of gross additions to make the sub number remain positive.
Yeah, that’s a good point. So with the structural limit in the current business model, what are the prospects for innovation that will drive growth. Mel certainly understands your point. What’s his plan?
Call it nerves, but I’m not feeling great about the call tomorrow.