Can't listen to the webcast of XM's 3Q07 earnings call? Have no fear, because I'm live blogging it for you right here. Just keep hitting that refresh button to see the updates...

10:01am: Still in a holding pattern....

10:04am: I guess we're late? Still on hold.

10:05am: And we're good to go. Valarie is giving us the intro..

XM Satellite Radio Holdings Inc. (XMSR) announced their 3Q07 earnings results. Revenue increased roughly 20% year over year to $287 million compared to $240 million in the 3Q06.

XM ended the quarter with approximately 8.57 million subscribers compared to approximately 7.19 million subscribers in the prior year period.

XM recorded gross subscriber additions of 952,000 and net subscriber additions of 315,000 - that's compared to 868,000 gross additions and 286,000 net subscriber additions in the same period last year.

"XM achieved year-over-year gains in both gross and net subscriber additions, despite weakness at retail, driven primarily by a record number of new automotive subscribers," said Nate Davis, XM President and CEO.

"We're already seeing the early results of the ramp in production of XM-equipped vehicles, which will provide XM with sustained subscriber growth for 2008 and beyond."

SAC rose to $70 compared to $59 in the same period last year - this includes ~$10 related to increased factory installations by new automotive partners. CPGA was $116 compared to $94 in 3Q06.

Adjusted operating loss (formerly adjusted EBITDA) was $47 million compared to a loss of $2 million in the same period of 2006. The 2007 third quarter adjusted operating loss includes $9 million in expenses related to the company's pending merger with Sirius Satellite Radio Inc..

XM's net loss was $145 million for 3Q07 - compared to a 3Q06 net loss of $84 million. XM's net loss is at $0.47 per share. On average, 25 analysts polled by First Call/Thomson Financial expected the company to report a loss of $0.44 per share.

Full financial report after the jump. Conference call kicks off at 10am ET today.

If you thought Citigroup putting the chances of the Sirius-XM merger at 69% was being optimistic, wait till you see what Tom Watts of Cowen & Company wrote in a recent note issued to clients.

Watts finds that there's a “70%-plus chance” that the merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. wins government approval.

The Cowen & Company analyst says the Department of Justice decision should come “relatively soon,” with both companies in full compliance with the DoJ’s information requests. He says a ruling from the FCC should follow soon after. About a month ago, Watts said that approval of the deal could come as early as October.

Watts has Outperform ratings on both stocks, “even without M&A potential.” He thinks both companies can beat the market on free cash flow potential alone. Watts also feels that XM and Sirius set conservative subscriber growth estimates for 2007, “setting the stage for out-performance in the second half.”

[Barrons]

XM Satellite Radio's third quarter 2007 earnings call to discuss their financial results has been scheduled for next Thursday, October 25th, at 10am ET.

Here's the dial-in info:

Call-in number: (877) 265-5808
Local call-in number: (706) 679-7931
Conference ID#: 20811705

You can also listen in to a live webcast of the conference call online.

Historically, Sirius announces their earnings call date/timing after XM does, so we can fully expect one to come across the wires shortly.

In a follow up to the note issued earlier this week, Citigroup analyst Eileen Furukawa suggests in a report issued this morning that there is a 69% chance that the XM-Sirius merger gets approved by either the FCC and/or the DOJ by December 5th.

Furukawa estimates the current Sirius Satellite Radio Inc. stock price reflects a 41% chance of approval, "which is too bearish" while the XM Satellite Radio Holdings Inc. price reflects an even lower 29% chance of approval.

"Based on our view of a 69% probability that the deal is approved around December 5, and the associated stock moves based on the ruling, we conclude that XMSR calls are cheap, " write the Citigroup analyst.

While the analyst maintains a "Buy" position on both SIRI and XMSR, Furukawa feels that buying XMSR January '08 calls can be an attractive alternative strategy for investors looking to gain exposure to the XMSR/SIRI M&A event.

If the deal is rejected, Furukawa anticipates that XMSR will trade down 26% while SIRI will trade down 25% from the intraday price used.

"However, if the deal is accepted, to which we attribute a 69% probability, then we sense that both stocks will move higher in response," adding that the the speed of the move depends on how much investors believe the speed and magnitude of synergies can be achieved.

Citigroup analyst Eileen Furukawa issued a highly bullish report this morning, who feels that SIRI and XMSR stocks are currently undervalued and that the pending XM-Sirius merger has a “high 60%” probability of success.

Furukawa says that a “detailed, item line analysis” of a merger of XM Satellite Radio Holdings Inc. with Sirius Satellite Radio Inc., found that the satellite radio marriage could create “present value” cost savings of $7 billion - with 10%-20% savings across customer service, programming, R&D, sales and marketing and other areas.

In addition, although she does not specifically factor this into her model, Furukawa says that the combination “could drive higher ad revenues given larger combined reach.” Furukawa's model also doesn't include savings on capital expenditure from shifting to a single system, which she feels could be worth $750 million long term.

Furukawa says that XM's stock price at last night’s close reflects a 24% chance that the pending merger of the two companies succeed, a view which she says is too bearish. The Citigroup analyst thinks the deal has a “high 60%” probability of success.

She gives the stock a “probability weighted” target price to $19.50, up from her previous target of $15, but she also says that the company could be worth $23 a share if all of the synergies she sees are realized.

Both XMSR and SIRI were up significantly this morning on the news.

[via Barrons]
Thanks Gary!

Sirius and XM shareholders are slated to cast their vote on the proposed merger on November 13th, according to a recent SEC filing.

Structured to give existing XM and Sirius shareholders roughly 50/50 ownership, the deal sets up XM shareholders to receive 4.6 SIRI shares for each XMSR share. Based on Sirius' closing price as of yesterday, the deal values XMSR at $15.92 a share.

A vote in favor of the merger is required only from XM shareholders, though Sirius investors must approve issuance of shares and other matters related to the deal.

Sirius investors who held shares as of Tuesday and XM shareholders as of Monday are eligible to vote on the deal.

Set to hold their meeting on the same day, Sirius' meeting is scheduled for 9am ET, and XM's meeting is scheduled for 3pm ET. Sirius' stockholder meeting will be held in The Auditorium at The Equitable Center, 787 Seventh Avenue, New York, New York 10019 and XM's shareholder meeting will be held at The Renaissance Mayflower Hotel, 1127 Connecticut Avenue, NW, Washington, DC 20036.

The end is near...

[SEC Filing via CNN Money]

Mel Karmazin said the Department of Justice is seeking more details on the proposed merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

"They continue to ask for information," Karmazin said in an interview following a taping of "The Charlie Rose Show" on Tuesday.

"We still think the timetable will be in the fourth quarter," Karmazin added, though didn't specify what type of data is being sought.

The head of the DOJ's antitrust division, Thomas Barnett, told a congressional hearing last week he needed to know more before making a decision on the proposed combination of the only two satellite companies. He declined to give a timeframe, though said that DOJ wants to move "as quickly as possible."

On September 5th, Sirius and XM they had complied with DOJ requests for more information, causing analysts to predict that a decision on the merger could come as soon as October.

[New York Post]