Reason To Celebrate? Sirius Posts Smaller Q3 Loss

Oct 30th, 2007 | By | Category: General

sirius.jpgSirius Satellite Radio Inc. announced a smaller loss in the third quarter (ending at the end of Sept. 2007) as the company added subscribers. It still hopes to gain regulatory approval in order to close its deal to merge with XM Satellite Radio this year.

Sirius lost $120.1 million in the quarter that just ended, compared the $162.9 million loss, or 12 cents per share, over the same period a year ago. The loss was in line with analysts’ expectations. Earlier last week, XM also announced its quarterly earnings and losses.

Sirius announced earlier this year that it had agreed to combine with its (only satellite) rival XM, and the deal is undergoing regulatory review. The FCC had originally said the two satellite operators couldn’t merge, but the companies argue that there is far more competition for audio entertainment now from (non-satellite) portable music players, Internet radio and other media (like podcasting). If the merger is approved, the companies have said they would offer pricing plans that would allow customers greater choice in which channels they receive.

The deal is still facing scrutiny from the Department of Justice and the Federal Communications Commission.Sirius said it plans to hold a shareholder vote on the acquisition of XM on Nov. 13, the same day XM’s shareholders are expected to vote.

Sirius added 524,938 subscribers for a total of 7.7 million, 50 percent more than this time last year. The company said it is on target to have 8 million subscribers by year’s end. XM is the larger of the two competitors, at 8.6 million subscribers, but their customer base has been growing more slowly than that of Sirius.

Both XM and Sirius have been attempting to broaden their subscriber base by striking deals with automakers to outfit new cars with the satellite receivers; in the meantime, retail sales of the hardware continue to soften. According to the Washington Post, Sirius’ new subscribers resulting from car sales nearly doubled in the quarter to 462,749, while new customers added via retail store sales slumped to 64,101 (from 205,899).

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