Sirius XM To Announce Q4 and Full Year 2011 Earnings
Sirius XM Radio (NASDAQ: SIRI) today announced that it plans to release full year and fourth quarter 2011 financial and operating results on Thursday, February 9, 2012. SiriusXM will hold a conference call at 8:00 am ET on Thursday, February 9, 2012 to discuss these results. Investors and the press can listen to the conference call via the company’s website, siriusxm.com, and on its satellite radio service by tuning to Sirius channel 94 or XM channel 145. The call will also be available on the Sports Zone channel on SiriusXM Internet Radio as well as through the SiriusXM Internet Radio App for the Apple iPad, iPhone, and iPod touch, and on BlackBerry and Android-powered smartphones.
The company had guidance to hit in 2011, and has already established preliminary 2012 guidance.
2011 Guidance
- Expecting revenue of about $3 billion
- Adjusted EBITDA of about $715 million
- Free cash flow “approaching” $400 million.
- Subscribers at 1.6 million net additions
For 2012, Sirius XM issued the following guidance:
- Revenue up 10% to about $3.3 billion,
- 20% growth in adjusted EBITDA to $860 million
- Free cash flow growth of 75% to $700 million.
The company has already announced that the net subscriber additions were at about 1.7 million. Whether they hit other 2011 guidance has not been announced. Of the metrics they guided to, the free cash flow may be their biggest challenge. At the end of Q3 Sirius XM had stacked up an impressive $224,000,000 with the average being about $75,000,000. In order to meet FCF guidance Sirius XM needs to generate an impressive $156,000,000 to $176,000,000 in free cash flow (remember, their guidance is “approaching – thus the range). This is $80,000,000 to $100,000,000 more than their average for the previous quarters this year. Will they hit it? Yes.
There is no doubt in my mind that siri will reach $400M fcf for the year. The last two years fcf in Q4 was particularly strong at $167M in 2010 and $150M in 2009. I expect siri to hit between $200M and $220M in Q4, 2011 thus building their cash reserves in the bank at over $800M. I would love to hear what debt fear mongers would have to come up then.
I also expect them to beat their 2011 EBIDTA target by about $70M reaching $785M and surpass their revenue guidance by about $40M or so reaching $3.04B.
But most importantly, such 2011 numbers should affect 2012 guidance. If Mel does stick to his 2012 EBIDTA target at 20% off 2011, this means that new EBIDTA guidance should be around $915 and fcf may go up to $750M with revenue at $3.4B for 2012.
If this is going to happen, the fundamental question remains – will this move the stock or is this still not enough?
V,I,,
Don’t forget that the new used car deals, the Edge, and the Lynx all carry costs that will impact EBITDA
I am confident that Mel structured these deals in such a way that the are cash beneficial for him. Also, remember we were talking about the potential negative cash impact of new installs due to OEM’s much faster pace. Never happened. SAC even got smaller. Mel is as stingy as one can be. This is why we still see crappy apps and inadequate customer service.
However, once he feels that his targets are there, he may loosen up by a tad to eliminate OBVIOUS problems. My gravest concern about Mel is that in pursuit of HIS fcf goals he may sacrifice innovation to a smaller or god forbid larger degree. His emphasis and priority #1 has been on the content where he spares no money and no effort (although he will never give up hard negotiation). I just wonder where he stands on innovation.
Yesterday’s Fed announcement that interest rates will remain low to the end of 2014 is a positive for SiriusXm
I would think sometime quickly after the cc meeting if numbers look good, an upgrade in ratings would occur followed by refinance/increasing years of existing debt???
Given that Mel and Frear said they wanted to keep the debt ratio at 3-1, it would appear there is opportunity.
I haven’t been following the financial terms of their current debt. Howeer, we know Spencer does. So, I’m sure he will comment at some time.
In the meantime, we will just keep watching siri getting stronger with every quartely report.
I believe that in 2012 already siri will get to the investment grade. It is two notches apart today. If you follow Mel, he made clear that he did not care much about these upgrades because already today he is being offered about 6% refinance rate.
As you know, Mel was not planning to buy back debt. But he may have to reconsider when he finds himself sitting on a pile of cash, cannot buy back shares because of the threat of liberty’s control and sees no targets for acquisition that make sense.