Thursday, XM Satellite Radio Holdings Inc. (XMSR), which is being acquired by rival Sirius Satellite Radio Inc. (SIRI), reported a narrower loss in its fourth quarter as subscriber additions boosted revenues by 20%.
For the fourth quarter, XM Satellite Radio reported net loss attributable to common stockholders of $238.82 million compared to a loss of $263.2 million in the fourth quarter of 2006. Net loss per share for the fourth quarter was $0.78, compared to a loss of $0.90 in the same quarter last year. The current quarter results included merger and settlement charges of $86 million.
Adjusted operating loss for the fourth quarter was $117 million, in comparison with a loss of $69.82 million in the comparable quarter last year.
XM reported total revenue of $308 million, an increase of 20% over the $257 million total revenue reported in fourth quarter of 2006.
Analysts, on average, polled by First Call/Thomson Financial, expected a loss of $0.63 per share on revenue of $303.12 million.
On February 26, Sirius Satellite Radio also reported a narrower loss for its final quarter of 2007 at $166.2 million or $0.11 per share, compared to a loss of $245.6 million or $0.17 per share in the prior-year quarter. Total revenues for the latest quarter rose 29.2% to $249.82 million. Sirius added 654,309 net subscribers during the quarter taking the total to about 8.3 million from about 6.0 million fuelled by retail and OEM channels.
During the fourth quarter, XM added 460,000 subscribers, compared to 443,000 subscribers added in the same quarter last year. Subscription revenue improved to $266.45 million from $220.54 million in the year-ago quarter. XM added 1.4 million net new subscribers ending 2007 with 9.03 million subscribers, an 18% increase over the prior year.
Monthly churn rate for the quarter declined to 1.72% from 1.79%. Average Revenue Per User, or ARPU, rose to $10.14 from $10.05 a year-ago. Total revenue per subscriber decreased by a penny to $11.71. Subscriber acquisition costs advanced to $87 from $74 in the year-ago quarter. Costs per gross addition totaled $140, higher than $128 in the corresponding quarter prior year.
For fiscal 2007, XM reported a net loss attributable to common stockholders of $682.4 million or $2.32 per share, compared to a loss of $731.7 million or $2.70 per share in fiscal 2006.
Total revenue increased 22% to $1.14 billion from $933.42 million last year. Wall Street analysts estimated a loss of $2.04 per share on revenue of $1.13 billion.
Adjusted operating loss for the full year 2007 was $238.04 million, compared to a loss of $166.17 million prior year.
In 2007, XM's automotive partners increased production of XM-equipped vehicles by 64% over 2006, with 3.5 million installs and more than a million in the fourth quarter alone.
In 2007, XM's automotive partners produced 3.5 million XM-equipped vehicles. The fourth quarter of 2007 saw XM's automotive partners continue to announce and introduce more vehicle models with factory-equipped XM and the real-time traffic service XM NavTraffic. In addition, XM launched new channels, including XMX, an innovative new channel featuring its most popular and critically-acclaimed original music shows all in one place.
In November, XM stockholders have voted to approve the merger with Sirius. In February 2007, SIRIUS and XM announced a merger that would combine the two radio services and create a single Satellite Radio network in the United States and Canada. Each share of XM stock will be replaced with 4.6 shares of SIRIUS. Each company's stockholders will retain approximately 50% of the joined company. Currently, the merger is under review by the Federal Communication Commission and a Senate antitrust task force.
XM shares are currently up 13 cents or 1.05% and trading at $12.57. Sirius stock is also up 2 cents to trade at $2.96.
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