Yesterday, Sirius reported ending the year with just over 6 million subscribers... so what does this mean about XM's subscribers?
Bank of America analyst Jonathan Jacoby writes in a recent report, feels that since "Sirius ended '06 with 6.02 subscribers, below [Bank of America's] model of 6.1 million subs (& the Street at 6.2 million)... XM probably will fall short of the low-end of its guidance range for year end subscribers of 7.7-7.9 million."
Other analysts, such as Bear Stearns' analyst Robert Peck, were more conservative with their models - so Sirius' results actually came in above their estimates. As a result, they're more bullish on XM's subscriber numbers, expecting that "XM likely may have ended the quarter with 7.85M subscribers, about 50K higher than [Bear Stearns'] current estimates."
Didn't XM say they were no longer going to announce subs until their reports?
xzi is correct. No sub announcements until XM's next report in >2 months.
I wonder if Sirius breaking 6 mil would put pressure on them to release good results early.
Also, depending on how much juice is in the post-holiday activation season, they might pass 8 mil before the next report comes out anyway. It's hard to imagine they'd pass up that press release.
#1 XM anouced they will not announce sub numbers till the CC's
#2 XM may have a CC at the CES
#3 Remember GM's employee discount last year? remember how that killed OEM for XM last year? That did not happen this year. I expect about 600,000 to 680,000 subs.
how many are parking lot subs? How many are promo period subs?
Last count they had 1.2 million promo subs. add in the new OEM's of about 300k to 350k and where are we at?
How many Self paying subscribers are there? And for gods sake please ... I hope they did not count Canadian subs. That would be a disaster.
My prediction - 7.62M - 7.63M ending subs. That is only 435K - 535K NSA and below even their lowered (twice) guidance range. If they would have hit the 8M, there would be a release. I expect a release like last year that due to this and that (excuse and non-execution) they got to the number a few days late - but essentially got there. Close does not cut it when it comes to guidance, some stocks take a hit b/c they don't beat guidance.
This miss on subs will also translate into less deferred revenue which will affect their chance to get to CFBE. With all the ads with those dumb reindeer I saw this holiday season, it does not appear that they were holding back spending. As we all saw last year, it is one thing to miss the number, it is another to overspend in the process.
And I am not an XM hater - I am a shareholder, just hoping this helps facilitate a change in management.
XM would be justified in counting 20% of XM canada's subs because they own 20% of XMC. This is standard practice. Companies like Vodafone account for their subscribers in this manner.
I'm going to go ahead and say XM finished the year with 8 million.
It should be noted that I'm an overly-optimistic douchebag, but whatever...
Westfall
Those little reindeer ads are extremely cheap to produce and the media buy was also mostly cable. Again, the cheapest buy. XM certainly didn't spend much over the holiday's. I'm suprised, I thought they'd do more but they absolutely didn't overspend.