Sirius XM (NSDQ: SIRI) Satellite Radio reported a net loss of $249 million in the fourth quarter of 2008, and a huge drop in new subscribersfrom 1.1 million in Q407 to only 82,945 in Q408. But the company was able to narrow its loss from the year-ago quarter (the loss in Q407 was $405 million), thanks to aggressive cost cutting. Pro forma fourth-quarter 2008 revenue grew 16 percent to $644 million, while adjusted operating income was up to $32 million from a loss of $224.1 million during the same period in 2007.
The fourth-quarter results indicate Sirius, like many other companies, is struggling as consumers tighten their belts. The number of people signing up for the service dropped by more than 600,000 in the quarter versus during the same period in 2007, while the number of subs disconnecting their service jumped by more than 400,000.
While the company chopped $220 million from operating expenses over 2007, debt payments continued to drag down the bottom line. The company secured a temporary lifeline from Liberty's John Malone last month in the form of $530 million in loans . Focus is now on the company's ability to grow despite the recession.
Other highlights from the fourth quarter results:
Average revenue per user increased to $10.60 from $10.42 in the fourth quarter 2007, helped by sales of premium "best of" packages but hurt by less ad revenue and discounts to car subscribers.
The company's efforts to cost-cutting discipline appeared to be across all operations, with sales and marketing expense down 34 percent versus the same period in 2007 due to a decrease in advertising spending, more spending on customer retention.
Some 44 percent of car owners with the satellite radio option installed in their cars became subscribes versus 51 percent during the same period in 2007.
By Rory Maher