XM Satellite Radio ended 2006 with over 7.625 million subscribers, adding 1.695 million new subscribers in 2006.
Based on preliminary results, XM achieved positive cash flow from operations during the fourth quarter of 2006. Much like Sirius, this is great news and a show of improved financial discipline from both companies.
Hitting 7.6 million subscribers means that XM added more than 442,000 new net subscribers during the 4Q06.
"XM completed another year of significant subscriber growth, despite retail softness, and did so with continued cost controls, achieving positive cash flow from operations during the fourth quarter," said Hugh Panero, XM's CEO in a statement.
The 7.625 million net subscribers is just below XM's revised guidance range of 7.7-7.9 million subs. While expectations on The Street weren't too high, it's still a disappointment. Sirius probably took a higher-than-expected retail share in the fourth quarter that aided to this outcome.
sounds like a 2-1 advantage in subs for sirius this Q
I think it starts to narrow in 2007 with OEM kicking in
Wow OnA's big deal with CBS brought XM 1.695 million subs. Way to go O&A! hoo hoo
Ryan, in your headline:
[b]"XM Acheives 7.6 Million Subscribers and First Cash-Flow Positive Quarter"[/b]
Just wanted to point out that this is the third time XM has had positive Op cashlfow. XM just hasn't played it up much in the past for good reasons.
The first time was in Q2 2005, when XM raised their rates and offered the prepay deal... this caused an inordinate number of prepays to signup.
The second time was in Q4 last year. XM downplayed (didnt even really point it out). I believe that it was due to the high amount of expenses that were deferred into Q1, because of the timing of paying subsidies and rebates.
Why bring it up this time? It's likely more sustainable -- and worthy to be pushed. Regardless, this is the third time that they had positive Operating cashflow.
A few things ---- these numbers are very, very disappointing. The business seems to have slowed to a crawl compared to expectations and Sirius - remember, the original guidance was in the 10M range. Second, the CFBE was part of their guidance and that is why they are touting it this time. They have also said they will be CFBE for the full year 2007. But, remember, this is not your typical CF - this is something they made up, Cash Flow from Operations --- meaning this is not CF they can then turn into "shareholder value" as I have read on other posts, this is CF before Capex - and we all know this is a capital intensive business.
Finally - we have all heard about the Sirius merger rumors - how about this one ----- an acquisition by Apple. Just something I heard - any thoughts on that - I say Apple pays no more than $20 a share.
this is terrible !
i hope OEM's will be able to save xm .
You're kidding right Henry Wirz? In 2006, XM had 1.695 million people subscribe while Sirius had 2.7 million people subscribe. That's over one million people of difference! XM predicted 9 million subscribers by the end of the year. Then they lowered it to 8.5 million. Then they lowered it again to 8 million. Then they lowered it for the third time to 7.7-7.9 million and they still fell short! Ha ha ha! O&A are such a non-factor. I loved it when I heard them gloat about Sirius lowering their guidance by 300,000 subscribers. Are they living in a fantasy world? XM fell short by 1,375,000 people! I admit there are a lot of Stern zombies that look at Howard as a god but you O&A fans that buy into Howard fading away and being a failure are so brainwashed it's frightening.
"While expectations on The Street weren't too high, it's still a disappointment."
You gotta love that!
Homer: Thanks for spotting that. I've corrected the typo.
O&A suck at times, and they're just part of the service. Same thing's true with Stern. No one show is the tentpole show for the service. Not everyone is subscribing just for these shows.
Hey dummies - Sirius isn't going to rocket past XM's numbers, more than likely both companies will level out and be within a few million of each other for a long time to come.
Have also you considered the fact that a big number of Sirius subscribers *already* own XM as well?
The fact that XM now has a positive cash flow should be the bigger news.
didn't huge say that ona were goibg to bring in subs when they went to free fm?
we invented failing tell them norton.
Should we link Pete's post for later viewing in the next couple of months. Pete I am not saving that you are wrong at all but saying that they are going to level out is yet to be seen.
As for the positive cash flow I am holding my opinions on both situations until both companies release their earning report. End of year earnings will really give us a better idea of what positive cash flow actually means because the wording that sirius and XM have release are a little different and who really knows what they actually mean.
Ouch.
does bud-light still post here?
http://www.orbitcast.com/archives/xm-satellite-radio-lowers-guidance-for-2006.html
"Get back to me at the end of the year & we'll see where both companies are"
remember my
" hopefully XM won't have to cut another 500k off the top."
seems someone was right huh, or maybe i was not even close since they cut a few more then 500k.
XM might be doing a little better if it didn't seem like they are on "coast" when it comes to music programming. There isn't ONE station I can just leave on, they have this absurd obsession with playing deep tracks. That's fine - except when stations named "Top Tracks" are constantly playing oddball tunes I'm not familiar with. People are spending more money, on bigger hardware because of the content at Sirius. I listen to Opie and Anthony, and I also enjoy the ClearChannel talk content on XM. Why doesn't XM promote that they have the #1 late-night radio show? Who knows. If XM could straighten out it's music channels they may actually stay #1, if not - they deserve what they get. At this point, though it's not going to happen - I'd like a 3rd choice in sat radio. Competition is good....
its ok to cushion the blow because your fans of xm, but when do you say that there is a major issue in having such a large gross sub number every quarter only to get a fraction in net gains. i hope they remain cash flow positive because there is a customer satisfaction issue. what are they doing wrong? i can't answer, but someone needs too.
they still added 1.7 million this year, and that is no failure by any means, i'm just concerned over the gross-net gap.
As an XM subscriber I can't defend XM and don't know how anyone else can. I hope Sirius sinks them until they shape up.
If you acknowledge that XM has given up on retail as Gary Parsons recently did, and you consider that XM has lost NASCAR, if you ponder that about 12% of Sirius subs are still subscribing due to Howard, how in the world would one expect any different results for 2007 ?
OEM's have not increased substantially, it appears that Sirius CAN now break into the GM contract this fall, and this is without considering that no substantial additional programing will change the landscape.
Is XM's stock worth more.... yes, about 10 times more. Is XM in a better financial position albeit about 30% more debt than Sirius ? .... Yes again.
However, there is no way that XM can remain the leader in satrad total subscribers past Q2 of 2008 at this rate.
XM has enjoyed many luxuries due to this # 1 status. I'm afraid that will soon be over based on the trends.
They will not soon be leading.
Content matters.
"and you consider that XM has lost NASCAR"
I subscribe to XM and could care less about losing Nascar. Sure, it's going to hit XM a bit but it makes sense in the big picture. Nascar's popularity is in a two-year decline, and in my opinion is either going to somehow manage to successfully fully mainstream itself (while the actual "racing" part is diminished even more) or spiral inward and crash. The later will happen if GM and/or Ford pull out, which in my opinion they should. Just as Nascar wasn't worth what XM would have had to spend, it's not worth it for any of the three makes currently in it to stay in it. With the current "Car of Tommorow" crap and "Common Templates" the manufacturers input is less and less. They'll pay to put their brand decal on a spec car, that's what it's slowly coming to. XM spent 15 million for a 5 year contract and somehow they are worth over 7 times that to Sirius when MILLIONS less people are watching on TV? I still have the SAME racing shows on XM (including at the track coverage) and can hear the Cup races on terrestrial (the same coverage with the same commercial breaks) if I was so inclined. XM also has shows with two popular drivers, one of which carries the Earnhardt name. So they are at least trying a little bit to counter some of the effects. It most certainly will help keep some fans who get a Sirius radio from outright cancelling XM.
XM has problems - I agree. But I do think that they made the right overall decision with Nascar. We'll see.
It was a terrible decision they made. They have continually let content slip through their fingers. Imagin if they paid for Stern. Even those of you that HATE him have to agree that Sirius would be in the shit hole if not for Stern arriving. Not only has his arrival made Sirius a household name, but it has changed the last two years for both companies significantly. Every deal XM has made has been crap. They still believe they can win people over without actually spending on the content. This whole everything is going to OEM is cute and all, but if your content sucks, and everyone is buying Sirius at retail, then XM is going to have a bunch of free-loading subs that cancel as soon as the trial period is over, only to go out to the retail shops and buy Sirius. Content is King! If Sirius has it all, what is left for XM. A show about the sport? What is the point? Especially when the sport is on the air live on the other companies service. Whats next...XM feels that MLB isn't worth it anymore? I don't see them fighting to add any new colleges either...must be a pattern with XM. A pattern that could lead to their demise.