Sirius Satellite Radio Losses Up, As Revenues Soar - InformationWeek

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Sirius Satellite Radio Losses Up, As Revenues Soar

The number of subscribers rose 190% in the quarter, to 3.3 million from 2.2 million a year ago.

Sirius Satellite Radio Inc. on Friday said losses for the fourth quarter widened, but revenues and subscriber growth soared.

The New York-based digital radio network said net losses for the quarter ended Dec. 31 were $311.4 million, or 23 cents a share, compared with $261.9 million, or 21 cents a share, a year ago. Revenues, however, rose 262 percent to $242.2 million from $66.9 million a year ago.

The number of subscribers rose 190 percent in the quarter to 3.3 million from 2.2 million a year ago. The company expects to have more than 6 million subscribers by the end of the year.

Sirius, like its larger rival XM Satellite Radio Holdings Inc., has spent heavily on programming and marketing in order to drive subscriber growth and revenues.

XM on Thursday reported a net loss in the fourth quarter of $268.3 million, compared with $188.2 million a year ago. The company's strategy of increasing losses now in order to grow the business led to an internal disagreement that prompted the resignation of director Pierce J. Roberts Jr., a former telecom investment banker with Bear Stearns, from the XM board. The company says it expects to be profitable in the fourth quarter of this year.

Sirius said subscriber acquisition costs per gross subscriber addition was $113 for the fourth quarter, compared with $124 a year ago. For the full year, SAC was $139, compared with $177 in 2004.

Sales and marketing expenses for the year, however, increased by $16.1 million to $170.6 million; and programming and content expenses rose by $35.2 million to $98.6 million.

Among Sirius's most expensive programming deals was in signing shock jock Howard Stern, who launched his radio talk show on the network last month. Sirius last year signed a five-year, $500 million contract with Stern.

Sirius last year also launched Martha Stewart Living Radio and is scheduled to start Nascar coverage in 2007.

For the full year, Sirius reported a net loss of $863 million, or 65 cents a share, compared with $712.2 million in 2004. Revenues for 2005 increased to $242.3 million from $66.9 million.

SIRIUS said that in 2010 the company is expected to generate about $3 billion in revenue and approximately $1 billion in free cash flow, after capital expenditures.

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