This story was written by David Kaplan.
The newly merged Sirius XM satellite radio company took a big swallow of bitter medicine in Q3, reporting a loss of $4.88 billion ($1.93 per share) versus last year's loss of $119.6 million ($0.08 per share) when it was solely Sirius (NSDQ: SIRI). The loss was on an impairment charge to goodwill, mostly related to the drop in the company's share price since the merger agreement between Sirius and XM in Feb. 2007. The two finally merged back in July. On the revenue side, sales were up 16 percent to $613 million, year-over-year. Analysts surveyed by *Thomson Reuters* estimated a Q3 loss of 9 cents a share on sales of $587 million, according to MarketWatch.
In a statement, CEO Mel Karmazin trumpeted the company's revenue growth, pointing out, as he's been saying for months, that dwindling auto sales wouldn't have a disastrous affect. The company has pushed hard for years for satellite radio to be offered as a factory-installed option. Aside from the general economic pressures on radio and auto, the credit crisis is also causing Sirius XM investors some concern given a large debt payment due in February 2009. Karmazin repeated that the company is in talks with creditors, MarketWatch reported. Other details from Sirius XM's Q3 included:
-- Subscriptions increased by 17 percent, adding 344,100 subs for a total of 18.9 million in Q3.
-- Average monthly self-pay customer churn was 1.7 percent.
-- The merged company lowered the cost of acquiring new customers by 15 percent, to $74 compared with Q307's $87.
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By David Kaplan