XM Satellite Radio has reported a change to its subscriber and financial guidance for 2006, projecting that it will end 2006 with 8.5 million subscribers (down from earlier guidance of 9 million), resulting in subscriber revenues of $835 million and an EBITDA loss of $235 million.
XM reaffirmed that it remains on track to have positive cash flow from operations for the fourth quarter of 2006 and on an annual basis for 2007.
Hugh Panero cited "overall softness in retail during the second quarter" as one of the key reasons of this. Perhaps the line of most concern from the press release is this one:
XM is currently working through regulatory and legal challenges, the resolution of which could affect future product availability and operating results, and require us to review this revised guidance.
Let's hope this is only referring to the Audiovox Xpress.
This is going to make Gary Parson's session today at the Morgan Stanley Media Conference a little hot under the collar. Unfortunately, neither stock needs any more bad news at this point.
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