Is Sirius XM Outsmarting Ford and GM?

Sirius XM Radio’s (NASDAQ:SIRI) growing subscription base this year has been credited to improving car sales, but Seeking Alpha makes the point that the satellite radio may actually be outperforming the U.S. auto industry leaders.

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Several analysts believe that 2012 is the best year for auto sales since 2007. On average, analysts surveyed by Reuters expected a 13.9 million annualized sales rate in June. In the first half of the year, 7.27 million new cars and trucks were sold in the country, indicating full-year sales of 14.5 million. The high adjusted annual rate of car sales has led Lazard Capital analyst Barton Crockett to predict that Sirius, which pre-installs its radios in vehicles, could add close to 2 million subscriptions this year. That number is 25 percent higher than the company’s guidance of 1.6 million.

However, Ford (NYSE:F) has faced some big problems internationally, with the slowdown in Europe continuing to weigh in on profits. Last month, Ford issued an earnings warning, saying international losses could reach $570 million against $190 million in the first quarter. Asian earnings are also said to register a pretax loss due to intensifying competition, margin deterioration, and continued investment in the region. General Motors (NYSE:GM) is also facing similar troubles in Europe, with the automaker reportedly planning to cut costs by shedding 500 managers in the continent to add to the 8,000 factory workers let go over the past three years.

Sirius (NASDAQ:SIRI), meanwhile, has not only outperformed both automakers, it also received an upgrade from several analysts this week. On Thursday, ISI Group analyst Vijay Jayant launched coverage of the stock with a Buy rating and $2.80 target price. Sirius is also looking forward to a great earnings report for the second quarter owing to the growth in paying customers.

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