Sirius XM revenues up 16%


“We think the environment sucks,” said Sirius XM CEO Mel Karmazin, when asked in his quarterly conference call about the environment for selling more satellite radio receivers in new cars. But even with the woes of the auto industry, Sirius XM reported that Q3 revenues rose 16% and Karmazin is sticking with his claim that the company will turn EBITDA positive in 2009.

With no rival in satellite radio to worry about since the government approved the merger of its only two players, Karmazin is now talking about how his company stands in relationship to AM & FM radio broadcasters. So he said it was impressive that Sirius XM, which he refers to as the 2nd largest radio company in terms of revenues, grew Q3 revenues by 7%. At the same time, #1 Clear Channel reported revenues down 7% and #3 CBS Radio was down 12%.

Sirius XM had $612.8 million in Q3 revenues, up 16% on a pro forma basis from the previous year, when Sirius and XM were separate companies. Total subscribers grew 17% to 18.9 million. The pro forma adjusted loss from operations was cut by 64% to $37 million, before restructuring costs.

Karmazin maintains that churn remains low and the company is focused on retention. He also noted that quite a few people are now opting for a more expensive service, adding the “Best Of” programming package from the other of what used to be two separate operations. Meanwhile, few are taking the cheaper, stripped down tier that the company had to offer to win regulatory approval for the merger.

By the numbers, Sirius XM had gross subscriber additions of 1,846,996 in Q3 and deactivated 1,502,915, for net additions of 344,081. A year ago, the gross subscriber additions were 1,950,842 and 1,111,092 were deactivated, for a net gain of 839,750. Thus, Sirius XM had 18,920,991 subscribers at the end of Q3 2008, compared to a pro forma 16,234, 069.