Sirius XM Revenues, Costs Rise

sirius/xm radio

Things are looking up for Sirius XM Radio, which announced relatively strong first-quarter results on Tuesday, with increases in revenue, income and subscription base. However, it saw costs increase in the crucial area of subscriber acquisition.

Total revenues increased 11% from $605.5 million in the first quarter of 2009 to $670.6 million in the first quarter of 2010, according to Sirius XM, driving a 45% increase in pro forma income, from $108.8 million to $157.8 million in the same periods.

Net income increased 89% from $49.4 million in 2009 to $93 million in 2010. The total number of satellite radio subscribers increased 1.8% from 18.6 million to 18.94 million, with average revenue per subscriber increasing from $10.48 to $11.48, due in large part to the new U.S. Music Royalty Fee.

Overall programming and content costs fell 6% from $103 million to $97 million, despite increases in personnel and operating expenses. Customer service and billing costs decreased 7%, while satellite and transmission costs decreased 2%. However, subscriber acquisition costs jumped 28% from $83.2 million to $106.5 million.

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The increase in SAC reflected the company's expansion, accompanying a 29% increase in gross additions and higher numbers of automobile installations.

Looking forward, Sirius XM CEO Mel Karmazin stated: "The continuing recovery of the automotive sector and expanding signs of increased consumer spending are encouraging signs for the company's growth prospects."

The company expects net growth of about 500,000 new subscribers in 2010, with total annual revenues of $2.7 billion.

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