Sirius Q2 Subs, Revenues, Loss Up
August 1, 2006 at 5:39 AM (PT)
SIRIUS SATELLITE RADIO second quarter revenue nearly tripled year-to-year to $150.1 million, and the company added 600,460 net subscribers to end the quarter with 4,678,207 subs, but its net loss widened from from $177.5 to $276.7 million (13 to 17 cents/share), although 2006's figure includes a penny per share of impairment charges and 5 cents/share of equity charges while 2005's includes 3 cents/share of equity charges. Excluding the charges, net loss per share rose from 10 to 11 cents/share. Subscriber acquisition costs jumped 58% to $126.5 million but a 177% subscriber revenue increase offset the additional expense. Average monthly churn increased from 1.4% to 1.8%.
The company added 276,294 net subscribers through retail, 13% more than in the same period of 2005, and 324,574 through OEM automotive channels, up 167% and driven by a strong sales quarter for DAMILERCHRYSLER and FORD. Gross subscriber additions totaled 830,571,
SIRIUS upped its full-year 2006 subscriber count guidance from 6.2 to 6.3 million, with revenue guidance increased from $6000 to $615 million and free cash flow loss guidance widened from $480 to $500 million.
On the company's conference call, CEO MEL KARMAZIN noted that a consumer satisfaction study conducted in JUNE showed 94% of subscribers saying that they are satisfied with SIRIUS and that 90% would recommend SIRIUS to a friend. He also said that the company is "close to signing deals" to provide children's video programming through the SIRIUS satellite system, and said that the new "live wearable" Stiletto portable receiver will be available by the end of the SUMMER. He reiterated that the company "could be" free cash flow positive as early as fourth quarter and will be cash flow positive for 2007.
Responding to an analyst's question, KARMAZIN said that the company is "working closely with the FCC" to resolve the FM transmitter emissions issue and noted the NAB's opposition, but declined to say what arrangements the company is making with the RIAA regarding the recording capabilities of the Stiletto.