Sirius losses narrow

Sirius XM (SIRI) posted a second-quarter loss that was a penny better than Wall Street’s estimate. The satellite radio company, created last month in the combination of New York-based Sirius and Washington-based XM, posted Sirius’ standalone results for the quarter ended June 30. Sirus lost $84 million, or 6 cents a share, compared with the year-ago loss of $134 million, or 9 cents a share. Revenue rose to $283 million from $226 million a year earlier. Analysts surveyed by Thomson Financial were looking for a 7-cent loss on revenue of $283 million.

“Despite a tough economy and weak auto sales, gross additions set a new second quarter record,” said CEO Mel Karmazin. “In the second quarter both revenue and subscribers grew 25% as compared with last year, while cash costs remained essentially flat leading to a 70% reduction in our second quarter EBITDA loss.”
 
Total subscribers rose to 8.9 million from 7.1 million a year ago, driven by a 53% rise in subscribers using radios pre-installed in their cars and a 7% rise at retail, while subscriber acquisition costs fell 27% from a year ago. But the stock’s plunge to a recent $1.45 a share from nearly $4 last year shows that Karmazin will have to make some big changes if the cash-burning company is going to get back on Wall Street’s good side. The pressure is now on Karmazin to show that this long-awaited merger was a sound idea.