Siruis XM Satellite Radio Turns Up the Volume for Investors

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Sirius XM RadioHurricane Sandy may have closed U.S. trading for a day or two, but there are still stocks worth watching when it reopens: Sirius XM Radio, for example.

There was a time when it seemed as if Sirius XM Radio (SIRI) wouldn't make it.

The stock was trading at $0.05 a share -- yes, a nickel -- in early 2009. CEO Mel Karmazin was warning of a possible bankruptcy filing. Subscribers were starting to leave. Even though the merger between Sirius and XM was completed a year earlier, the company was losing money with meaty debt repayment milestones looming.

Things got better. Sirius XM found a willing investor. It was able to realize the merger-related synergies, turning losses into steady profits. The net cancellations that held the company back during the first half of 2009 returned to a state of net additions.

Everything's been going right for Sirius XM as it heads toward this week's quarterly report.

UPDATE: Satellite radio provider Sirius XM Radio (SIRI) will report earnings on Thursday instead of Tuesday.

Analysts see another quarterly profit when it reports on Tuesday morning. Revenue is expected to grow 14% as a combination of subscriber growth over the past year and a rate increase that began kicking in earlier this year.

Investors will still have questions. Longtime CEO Mel Karmazin -- the architect of the combination of Sirius and XM -- revealed last week that he would be leaving the company in February. Sirius XM revised its subscriber growth outlook higher earlier this month, but what about its revenue and adjusted EBITDA projections? Can recent initiatives help the company grow beyond its automotive stronghold?

This week's report may offer the answers to some of these questions.

Other Things Worth Watching

• The video game industry has been in a three year funk, but investors will get a fresh snapshot this week as Electronic Arts (EA) and Take-Two Interactive (TTWO) report. A couple of years ago EA tried to buy Take-Two, but it failed to garner enough shareholder support to complete the hostile takeover bid. These days EA is making a big push into social and casual online games outside of its marquee console releases. As for Take-Two Interactive, everybody just wants to know when Grand Theft Auto V is coming out.

• Another great snapshot for investors this week will be the automotive sector. Ford (F) reports on Tuesday. General Motors (GM) reports on Wednesday. Despite reports of improving car sales, analysts see both U.S. automakers posting declines on the bottom line. Will investors go for the accelerator or the brake pedal?

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Ford. The Motley Fool owns shares of Ford Motor. Motley Fool newsletter services have recommended buying shares of Ford Motor, General Motors, and Take-Two Interactive Software. Motley Fool newsletter services have recommended creating a synthetic long position in Ford Motor.






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7 Comments

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The Illuminati

The traders that control this stock...tsk tsk tsk they are baaaaaad news. They'll just take whatever is put into it, they will never let go of it. It is SIRIUS.

October 31 2012 at 9:55 PM Report abuse rate up rate down Reply
Chuck

From the beginning,I thought it should have video to make it - - and still do. It is nice as is, but - - - , satellite tv should sell if price is right . MLB is absolutely the worst in subscription cost and the constant black-out idiocy. It wouldn't be the first time greed stood in the way of advancement.

October 29 2012 at 11:26 AM Report abuse rate up rate down Reply
Chuck

From the beginning,I thought it should have video to make it - - and still do. It is nice as is, but - - - , satellite tv should sell if price is right . MLB is absolutely the worst in subscription cost and the constant black-out idiocy. It wouldn't be the first time greed stood in the way of advancement.

October 29 2012 at 11:26 AM Report abuse rate up rate down Reply
n.briley

Can you fix the typo in the heading? SIRUIS is misspelled :-)

October 29 2012 at 10:59 AM Report abuse rate up rate down Reply
bob

TOPLESS.

October 29 2012 at 9:57 AM Report abuse rate up rate down Reply
Hi RON

They do need to do some price adjustments - they have added a few "fees" the past couple of years that have not sat well with subscribers. Once you have the system installed and use it for a while - it is difficult to shut it off since you can get so many channels and a big variety. Some of the talk stations have too many commercials though... Clearly, this is the future of radio..

October 29 2012 at 9:40 AM Report abuse rate up rate down Reply
JOSEPH

If SIRIUS XM would drop their prices then maybe they would get more customers after free 1 year subscriptions ran out on the new cars that they purchased.

The last bill that I received for my SIRUS XM subscription was for $180.00 for the year. Also added on to the bill was New York CIty and State tax even though I do not live in New York.

October 29 2012 at 7:56 AM Report abuse +1 rate up rate down Reply