New Subscribers Help Sirius XM Earnings More Than Double in Fourth Quarter

Andrew Klips |

Sirius XM Radio Inc. (SIRI) reported Tuesday that the addition of more subscribers in the fourth quarter helped earnings more than double.  The satellite radio provider also posted record revenue for the complete year 2012.

Revenue in the fourth quarter was $892.4 million, a 14 percent increase over the year prior quarter’s total of $783.7 million.  Net income for Q4 2012 was $156.2 million, or 2 cents per share, compared to $71.3 million, or 1 cent per share, in the year prior quarter.

Analysts were expecting revenue of $898.7 million and earnings per share of 2 cents.

Sirius XM said that it added 2.0 million new subscribers in 2012.  That’s the highest total since Sirius and XM merged in 2007.  At the end of 2012, the company had a record 23.9 million paying subscribers.  Self-pay net subscriber additions improved by 36 percent year-over-year to nearly 1.7 million, resulting in an all-time high self-pay subscriber base of nearly 19.6 million, according to the company.

"Thanks to the outstanding team at Sirius XM, we capped a great 2012 with a strong fourth quarter, adding more than 500,000 net new subscribers and attaining outstanding revenue, adjusted EBITDA, and free cash flow.  Sirius XM also returned capital to shareholders for the first time in the history of satellite radio through a $327 million special cash dividend in December,” said Jim Meyer, Chief Executive Officer, Sirius XM.

A good chunk of that dividend goes to Liberty Media Corporation (LMCA), the largest shareholder of SIRI (50.2%) that recently garnered Federal Communication Commission approval to take control of Sirius XM.

For the full year 2012, revenue was an all-time high of $3.4 billion, up 13 percent from 2011 revenue of $3.0 billion.  Subscriber revenue increased from $2.60 billion in 2011 to $2.96 billion in 2012.  Net income for 2012 was $3.5 billion, or 51 cents per share, compared to only $427 million, or 7 cents per share in 2011, although 2012 included a $3.0 billion income tax benefit and $133 million loss on extinguishment of debt.

Adjusted EBITDA in 2012 was $920 million, up 26 percent from $731 million in 2011.

Looking ahead, Sirius XM affirmed its 2013 guidance of 1.6 million in new self-pay subscriber additions, revenue of more than $3.7 billion and adjusted EBITDDA of over $1.1 billion, amongst other things.

Often times criticized for an exorbitant amount of outstanding shares (5.3 billion) and rumored to possibly be heading into bankruptcy in 2008, the New York City-based company has made a strong recovery in the past four years.  Now in the midst of a $2 billion stock repurchase program, shares that once plummeted to around a nickel each have clawed back to late-2007 levels.

The bottom line for today is that SIRI’s revenue came up a bit short and earnings were in line with estimates.  Shares closed Monday at $3.16 and were trading modestly lower in pre-market activity at $3.13.

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Companies

Symbol Name Price Change % Volume
LMCA Liberty Media Corporation 28.50 0.31 1.10 300,007
RELV Reliv\' International Inc. 0.74 0.02 2.78 120,985
SIRI Sirius XM Holdings Inc. 4.16 -0.01 -0.12 22,051,566

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