At the same time as XM Satellite Radio (XMSR) announced it had passed 7 million subscribers, the company cut its year-end subscriber estimates to between 7.7 million and 8.2 million. Initial guidance was for 9 million by year’s end; that was cut to 8.5 million in May. The cited culprits: “current marketplace dynamics and regulatory uncertainties concerning ‘plug-and-play’ radios.” (FCC inquiries halted some shipments, while the MP3 radios were delayed and supply limited.) It’s also costing XM more to acquire customers: $64 in 2Q06 compared to $50 in 2Q05.
XM’s net loss widened to $229 million compared with $147 million in2Q05; after adjustments, the loss per share was $0.87 compared with $0.70 the previous year. The loss also was wider than expected; analysts anticipated a loss of $0.67 per share. Revenue rose 82 percent to $228 million from $125 million the previous year.
From the earnings call: Longtime board member Nate Davis, recently appointed president and COO, was on the call during his first week at work. He’s taking over many of the subscriber-related operational responsibilities from Chairman and CEO Hugh Panero.
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