Sirius losses in satellite radio

first_imgNEW YORK – Sirius Satellite Radio Inc. reported a wider loss in the fourth quarter Friday as costs for building its rapidly growing base of subscribers mounted. The company, which added shock jock Howard Stern to its roster last month, lost $311.4 million compared with a loss of $261.9 million in the same period a year ago. The loss per share came in at 23 cents, a penny lower than analysts surveyed by Thomson Financial had been expecting and 2 cents greater than the loss of 21 cents a year ago. Revenues more than tripled to $80 million from $25.2 million. Despite the relatively in-line results, the shares of both Sirius and its rival XM Satellite Radio Holdings Inc. fell on Friday, a day after XM disclosed the sudden departure of one of its board members, who warned of a looming “crisis” at that company if it didn’t rein in costs. Sirius, which is based in New York, said it added a total of 1.27 million subscribers in the fourth quarter, the leadup period before it added Stern to its lineup in early January. The company also said it expected to be profitable next year, and to generate about $3 billion in revenue and $1 billion in free cash flow, after expenditures, in 2010. Sanford C. Bernstein analyst Craig Moffett called the forward projection “very positive” in a note to investors. Sirius’ five-year contract with Stern was originally worth $500 million, but its value swelled to $600 million due to the appreciation of Sirius’ shares. XM has also signed big-ticket programming deals, including a $650 million pact with Major League Baseball. Sirius also announced Friday it had reached a new agreement to carry the Fox News and Fox News Talk channels beginning March 15. The previous agreement had expired at the end of 2005. For the full year, Sirius lost $863 million, or 65 cents per share, versus a loss of $712.2 million, or 57 cents per share, in 2004. Full-year revenues jumped to $242.2 million from $66.9 million. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! AD Quality Auto 360p 720p 1080p Top articles1/5READ MORECasino Insider: Here’s a look at San Manuel’s new high limit rooms, Asian restaurant XM also posted a much wider than expected loss on Thursday as it spent heavily on marketing to counter the threat from Stern’s arrival at Sirius. XM executives said they expected that spending to decline sharply going forward. Sirius’ shares fell 39 cents, or 6.9 percent, to close at $5.26 Friday afternoon after heavy trading, while XM’s shares dropped $2.41, or 10 percent, to close at $21.57, also in heavy trading. Both issues trade on the Nasdaq. Sirius and XM are spending heavily to expand their businesses, which charge about $13 a month for dozens of channels of commercial-free music, as well as talk, news and sports. Sirius reported that its costs for acquiring new subscribers more than doubled to $145.2 million from $64.9 million in the same period a year ago. Its average cost for adding each subscriber, however, fell to $113 from $124 in the same period a year ago. Sirius ended 2005 with 3.3 million subscribers, triple the level from a year ago of 1.1 million. XM has more than 6 million subscribers. last_img read more