Sirius Subscribers, Revenue, Net Loss Rise In Q3

SIRIUS SATELLITE RADIO third quarter net subscriber growth jumped 97% year-to-year to 359,294, resulting in 2,173,920 subscribers as of SEPTEMBER 30. The company is raising its year-end guidance to over the previously predicted 3 million as a result. Retail subscriber additions rose 56% to 209,920, and net automotive subscriber additions rose 230% to 149,000. Subscriber acquisition costs per gross subscriber addition fell 35% to $149., and churn was 1.8% for the quarter, 1.5% for the year to date.

Revenue for the quarter was up 250% year-to-year to $66.8 million, but net loss widened from $169.4 to $180.4 million (per-share flat at 14 cents).

The company reaffirmed its previous guidance on all metrics other than subscribers. The company ended third quarter with about $934 million in cash and securities on hand and says that positive cash flow may be reached as early as fourth quarter 2006 and will be reached for full year 2007.

“The third quarter represented another quarter of solid execution by our management team,” CEO MEL KARMAZIN said in a statement. “We continued to gain retail and overall market share in the quarter, while meeting our guidance for third quarter net subscriber additions. As we move into the important fourth quarter, we believe that our mix of innovative and competitively-priced products at retail, combined with more SIRIUS factory installations by our automotive partners, will yield strong year-end results, and we are raising our subscriber guidance to over 3 million to reflect this expectation. The introduction of MARTHA STEWART LIVING RADIO and the anticipation of HOWARD STERN’s arrival in JANUARY 2006 should also generate unprecedented excitement for our service.”

On the company's conference call, KARMAZIN said that SIRIUS wants to buy ads on STERN's current terrestrrial stations to promote the host's JANUARY 9 debut on the satellite service, but that INFINITY has "not yet accepted" the ads.  KARMAZIN said that STERN's SIRIUS show will have a "significantly, significantly lower commercial load" than his present show and that the company will "sell HOWARD differently,." stressing the availablity of national STERN spots for the first time.  Entertainment Pres. SCOTT GREENSTEIN parried a question about STERN's declining ratings on terrestrial radio by noting that STERN "is the biggest radio personality of all time... a lot of the (declining) numbers are a reflection of him being taken off more stations..."  GREENSTEIN noted "tremendous fluctuations from book-to-book" but asserted that STERN's "numbers are still the biggest numbers in all of radio."

KARMAZIN also said that SIRIUS' plans include delivering video to car receivers "as soon as next year."

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