• by Erik Sass  @eriksass1, August 2, 2011

Satellite broadcaster Sirius XM Radio has seen its fortunes turn around dramatically in the last few years, and the recovery was underscored dramatically in the company's latest round of financial results. It reflects strong growth in subscribers, decreased costs, and increased profitability.

Sirius XM ended the second quarter of 2011 with 21 million subscribers, the company reported -- up 1.5 million from the end of the second quarter of 2010. Growth in this key area has been even stronger than expected -- the company raised its predicted number of net new subscriber acquisitions for 2011 from 1.4 million to 1.6 million by year's end.

Indeed, Sirius XM CEO Mel Karmazin said that gross additions in the second quarter were "the highest level of any quarter since the merger of Sirius and XM" in 2007.

Total revenues, based largely on subscription fees as well as some advertising, increased 6.4% from $699.6 million in the second quarter of 2010 to $744.4 million in the second quarter of 2011. Profits soared from $15.3 million to $173.3 million over the same period. This was attributed partly to subscriber growth, but also to an aggressive cost-control strategy, which focused on reducing the average cost of acquisition for each new subscriber.

The average cost of acquisition for new subscribers fell from $59 in the second quarter of 2010 to $54 in the second quarter of 2011 -- an 8.5% decrease.

Average revenue per subscriber also decreased, but by a smaller amount, falling 2.4% to $11.53. Subscriber turnover was about the same at 1.9%, up slightly from 1.8% in 2010.