SiriusXM soared in Q2


Despite the auto supply chain problems in Japan, SiriusXM grew subscribers, revenues and free cash flow in Q2. CEO Mel Karmazin had been hesitant to raise Wall Street’s expectations three months ago, but now he’s more confident and has boosted projections.

As of the end of June SiriusXM had 21,016,175 subscribers, up 8% from a year earlier. In his conference call with Wall Street analysts, Karmazin proudly noted that 65% of all new cars being sold in the US now have factory installed satellite radios. With the auto marketplace improving, SiriusXM is now projecting that it will add 1.6 million net subscribers in 2011, up from the previous guidance of 1.4 million.

“After a strong first half, we now expect free cash flow in 2011 will approach $400 million, up from our prior guidance of approaching $350 million,” Karmazin said. That would be an increase of about 90% over 2010. The company is sticking with its guidance that revenues this year will be around $3 billion and EBITDA approximately $715 million.

Q2 revenue was a record $744 million, up 6% from a year ago. EBITDA was also a record, up 20% to $185 million.

Having escaped a possible Nasdaq delisting last year by getting its stock back above $1, SiriusXM is lately trading above two bucks and Karmazin is adamantly opposed to the idea of doing a reverse stock split to get the price out of penny stock territory.

“We speak with institutions all the time. We have not found one firm that wants to buy our stock, but can’t because of the price being under $5. We do not see any reason to do a reverse stock split. We have been getting institutional investors and look forward to that number increasing in the future,” the CEO told analysts and investors.

“We were also very pleased that approximately two weeks ago we were added to the Nasdaq 100 Index. We are now included among the most valuable companies listed on Nasdaq,” Karmazin added.