Sirius XM 4Q: Revenues, Income Up

Mel Karmazin Sirius Satellite Radio

For the first time since its merger in mid-2008, Sirius XM Radio reported positive annual revenue and income figures, suggesting the satcaster may at last be on firm financial footing -- a noteworthy achievement, considering the dire economic backdrop.

On a quarterly basis, total revenues increased 6% from $644 million in the fourth quarter of 2008 to $684 million in the fourth quarter of 2009, while average revenue per subscriber crept up 2.5% from $10.65 to $10.92 over the same period.

The company added 250,000 subscribers in the fourth quarter, while the average cost of acquisition for each new subscriber fell 9% from $70 to $64. Income from ongoing operations almost quadrupled from $32 million in the fourth quarter of 2008 to $115 million this year.

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Full-year revenue increased 4% from $2.44 billion in 2008 to $2.53 billion in 2009, as income from operations increased from a $136 million loss in 2008 to a $463 million gain in 2009. The improvement was attributed to the increase in revenue and a 20% decrease in expenses, reflecting the cost efficiencies resulting from the merger. Looking ahead, in 2010 the company expects revenues of over $2.7 billion, with operating income growing 20% to $550 million.

During his discussion of Sirius XM's 2009 results, Karmazin also touched on the state of negotiations with Howard Stern, one of the satcaster's high-profile talents, who hinted in recent months that he might be lured back to broadcast radio or TV. There have also been rumors he might replace Simon Cowell on "American Idol," although Deadline Hollywood squashed that idea in a Friday news story.

Earlier this month, Karmazin expressed confidence that Stern would stay with Sirius-XM, but during the conference call he said: "We have nothing to announce today," while noting that Stern "has been a great partner. We would like to continue doing business together."

Karmazin said the company expects to add a net 500,000 subscribers in 2010.

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