Sirius XM Hitting On All Cylinders
Sirius XM Radio announced their Q2 operating results this morning, and the company appears to be hitting on all cylinders with performance that the company has not seen in quite some time. Even with the modest recovery in car sales, Sirius XM demonstrated that they are able to monetize their business and deliver the goods.
Sirius XM increased or reiterated guidance and the numbers show that perhaps some of this guidance remains conservative. The company is increasing guidance for the full year 2010, projecting adjusted revenue will approach $2.8 billion and free cash flow will approach $150 million. SIRIUS XM continues to target approximately $575 million of adjusted EBITDA in 2010, and as previously announced, SIRIUS XM increased its guidance for net subscriber additions to approximately 1.1 million for the full year.
There were several items to note during the call. Subscriber acquisition cost per gross addition remained at the same $59 level we saw last quarter. The company increased ARPU to $11.81, and Free cash flow of $108 million, and Adjusted EBITDA of $154 million. Sirius XM will continue to seek ways to pay down debt for balance sheet improvements, and also announced satellite radio 2.0, a next generation satellite radio that should be available in time for the Christmas selling season next year. All of the details can be found in the press release issued by the company.
The tone of the street as a result of this call seems positive thus far, and with no real surprises during the call, that sentiment could well play out throughout the trading day. Sirius XM was able to offset costs in gaining subscribers with a nice jump in revenue. This combination led to an adjusted EBITA of $154 million, only slightly off of the $159 million reported in Q1, which is great news. The guidance on EBITDA for 2010 remains at $570 million. Thus far they have produced $313 million.
Sirius XM is trading up in early trading.
Position – Long Sirius XM Radio
It’s all good, however, the Market Makers insured a 4-cent drop yesterday, to end with a net ‘NO CHANGE’ in PPS today !
Until this type of manipulation is prohibited, and/or sadly the share float is ‘decreased’ by a factor of 10, we retail shareholders will continue the daily rape of million$ by pennie$ up & down & up & down &…………..
DID Tuna Amobi FINALLY ‘see the light’ ??
S&P RAISES OPINION ON SHARES OF SIRIUS XM RADIO TO BUY FROM HOLD
It’s kinda funny,5 yrs. ago there was only fluff in the story and the stock was higher. Today with some proof in the pudding we struggle, on good news,to gain a couple of pennies. Just hope Mel can keep delivering the proof.
Really happy with the Q2 EBITDA. Much higher than your projection. You had me worried for a second there. I was saying man Spencer predicted zero year over year Q2 EBITDA growth. What the??? I was pretty shocked.
Mel came through though, as always.
Mel always comes through. Folks just need to listen to what he says…they will not go wrong. Jf anything he always under promises and over delivers!
SIRI is not a hot stock yet its all about hype once all analysts and reporters start saying positive things about the stock such as how the risk is very low, and that there is a lot growth potential also that the business method has proven to be successful, you will then see it go up just like it it did last year.
The deal is no matter what smack is talked about siri/xm, revenue is really starting to speed up as well as subscribers!!!
All numbers look excellent. Though I’m not sure what to make of Satellite 2.0 for the fall of 2011. I think it was token comment by Mel to have something to say on R&D. And Sirius has plenty of time between now and then to figure out what the hell Satellite 2.0 is going to be.
Totally disagree. Probably will be the single most important step to turn retail into a growth area alongside OEM. The disclosure of more capacity (channels) and more functionality means they are going to take retail more seriously again. They obviously see opportunity.
2.0 in the fall of ’11. Tec. moves so fast it could be obsolete before it’s available. Fingers crossed. If they can get people excited again about the tec./service and get the balance sheet clean,Look out!
I was pleased with the SAC number. To sell 583k new subs and not have it increase over the 1stQ was nice to see.
Given that Cash for Clunkers started July 1st, ’09, we maybe facing some tough comparisons for the 3rd qtr, which is historically the weakest.
Also, David Frear said the launch expense for XM5 could be either in the 3rd or 4th Q.
In any case, siri continues to move in the right direction every quarter.