Sirius XM Radio Earnings Recap: How Will Its Strong Q3 Results Affect Q4?

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On Thursday, Sirius XM Radio (NASDAQ:SIRI) announced better-than-expected revenue growth in the third quarter on Thursday. Average revenue per subscriber rose to $12.14, up from $11.97 in the prior quarter. However, net income missed expectations after falling to $74.5 million, or 1 cent per share, from $104.2 million, or 2 cents per share, a year earlier. The recent third-quarter net profit included a loss on repayment of debt of $107 million.

Also on November 1st Sirius XM Radio reported third quarter earnings per share of $0.01 which is short of expectations by $0.01, and revenues of $867.3 million which beats by $2 million and is up 14% on an annual basis. Expectations for the fourth quarter have not changed from 2 cents. Over the past three months, the average estimate for the fiscal year has climbed from 8 cents per to share to 43 cents.

Chief Executive Mel Karmazin commented, “SiriusXM delivered a very strong third quarter for our shareholders, with 446,000 net subscriber additions, double-digit growth, and record levels of revenue, adjusted EBITDA, and free cash flow. The Company has produced more free cash flow in the first nine months of this year than in any full year in its history, and we’ve used this cash to reduce our debt to its lowest level since the merger of Sirius and XM.”

Sirius XM Radio’s third quarter results met expectations on revenues and on earnings per share. Year-over-year, revenue grew and GAAP earnings per share fell. Gross margins and operating margins rose, but net margins fell. On Friday, ten analysts polled by S&P Capital IQ anticipated revenue of $867.2 million on the same basis, and GAAP reported sales were 14 percent higher year-over-year from $762.6 million.