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Sirius Swings To Profit, But Just Misses On Revs

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After a long struggle, Sirius XM Radio (NSDQ: SIRI) has shown improvement lately and has certainly tried to give the market enough hints about what it hopes is the start of a turnaround. So unsurprisingly, the satellite radio company swung to a profit of $41.6 million ($0.01 per share) versus last year’s loss of $238.8 million (-$0.07 per share), while revenue was $670.6 million, just missing analysts’ expectations of $671.3 million. That said, analysts had expected Sirius only to break even in terms of profits.

So far, the company has gotten a boost from a resuscitated car industry — and help in the form of a needed investment from Liberty Media (NSDQ: LINTA) — after teetering on the brink of bankruptcy last year. Thanks to rising auto sales, Sirius’ gained 171,441 new net subscribers in Q1 after losing 404,000 the year before. CEO Mel Karmazin said the company expects to add more than half a million more subs by the end of this year.

Some highlights from Q1:

— Average revenue per customer was $11.48, compared to $10.48.
— At the same time, the cost of acquiring customers jumped 28 percent, or $23.3 million, which Sirius attributed to manufacturing costs.
— While cap ex grew $28 million over Q109, due to increased satellite spending, the company expects that spending to be lower over the next year.
— The churn rate was fairly low at 2 percent, slightly below what it was last year.
— Ad revenue was strong, rising 17 percent to $14.5 million.
— During the earnings call, Karmazin was asked about the status of contract negotiations are with Howard Stern. There was nothing new to report yet, Karmazin said, adding that an announcement would come during Stern’s show. “So if you’re interested, you’ll have to listen to Howard,” he told analysts.