As far as earnings, SIRIUS XM made over $71 million for the quarter, or $0.01 EPS.  Sales were up 6.5% at $over $783 million.  Estimates from Thomson Reuters were $0.01 EPS and $785.49 million in revenues.  Revenues were projected to be about $3.3 billion against estimates of almost $3.4 billion.

In short, it was mostly in-line.  SIRIUS XM shares have recovered so much from the lows that it has to beat estimates to keep everyone happy.

The law of large numbers catches up to every company in time.  SIRIUS XM added 542,996 subscribers in the quarter and about 1.7 million in whole year of 2011.  For 2012, that projection is to add 1.3 million, which some price increases may increase churn modestly.

The notion that Sirius XM was started with new coverage at Underweight by Barclays earlier this week is only one more item showing concern.

The positive case: If we are really going to get an explosive auto market later on in 2012, SIRIUS XM stands to win.  Analysts still have a price target consensus of about $2.36 on this stock.  Seeking Alpha has a story titled “Buyback And Takeover Chatter For Sirius; CBS Looks Solid” and that might lure more bulls to tout the stock without even reading the article.

The reality is SIRIUS XM is worth over $8 billion today even after the drop, about 4-times Pandora’s $2.2 billion value.  Pandora is also only expected to report almost $420 million in sales for the year ended January 2013.

With almost 4 billion shares, it is too bad that a reverse stock split would only attract short sellers.  Imagine if SIRIUS XM was able to report earnings of $0.10 ot $0.15 per quarter rather than just a penny each quarter.  It would be a psychological boost.  The short sellers would attack it and the company knows that.  There were already 305 million shares in the short interest as of mid-January and that was the highest short interest reading since last May.

SIRIUS XM is trading down almost 2% at $2.15 against a 52-week range of $1.27 to $2.44.  We have already seen 63 million shares trade hands against an average of 55 million shares a day.  If SIRIUS XM is going to trade down on valuation, perhaps Pandora needs some caution as well unless it can score a massive swing higher in paying subscribers.  Pandora shares are trading down almost 3% at $13.51 versus a post-IPO range of $9.15 to $26.00 and versus a $16.00 IPO price.

As a reminder, investors do have stock options that can be used to hedge this one if they want to stick with it for the long haul.

JON C. OGG

The trouble with relying on China as the future of the global car industry is that the people in the People’s Republic have lost some of their voracious appetite for new vehicles. The China Association of Automobile Manufacturers reports that, in January, sales of cars and light vehicles dropped 23.8% year-over-year. Analysts blamed the lunar holiday. But sales rose only 5% in all of 2011. So, the market has softened considerably.

China may produce sales of 18 million vehicles per year, well above the 13 million or so in the U.S. But car companies realize that American car sales are rising rapidly, while Chinese sales are not. The U.S., just two years ago the black hole of car sales, has become a foundation for revenue of multinational manufacturers. China has become a market where large investments in factories and marketing is a problem, at least for awhile.

Another challenge for foreign car companies in China is that local companies have grown tired of watching manufactures from the U.S., Japan and Europe exploit their market. All of the large local firms have learned manufacturing from their joint venture partners like GM and VW. That gives them the ability to stand on their own, and that can only hurt the sales of outsiders.

China has lost some of its luster for foreign car companies — that is, sales there have faltered — for a a number of reasons. Among them is that China’s middle class faces the effects of an economic slowdown and an inflation rate that hit 4.5% last month. And many Chinese cars are still relatively new. The factor of the replacement of cars that are six years or older, which is the cause for much of the improvement in sales in the U.S., is not as large a factor in China. There, the really huge volume in annual sales only happened in the past several years. The Chinese may not be ready to trade their cars in yet.

China, once the biggest hope for sales by global car companies, cannot sustain the revenue increases that the industry hoped it would.

Douglas A. McIntyre

Nissan reported a strong fiscal third quarter. Profits rose 4% to $1.54 billion. The firm sold 1.2 billion cars and light trucks, up almost 20% from the same period last year. Just one day earlier, Toyota said its earnings for the quarter were higher than expected. Just ahead of its earnings announcement, it raised its full-year forecast for sales to 9.58 million vehicles for the fiscal year. That will put it on a path to reclaim the global sales lead from GM and Volkswagen.

In Europe, Opel has set a collision course with unions, particularly in Germany. Opel has lost $13 billion since 1999. GM says it will restructure the entire unit, this as car sales across the region falter. The region’s large car union is allowed to appoint several members to the Opel board. They will give one of those seats to Bob King, the head of the U.S.-based United Auto Workers, which is a sign they are ready to strike.

Nissan and Toyota have had nearly no labor problems, particularly in the regions that matter most to them: the U.S. and China. The car industry battles with the UAW were largely won by the large manufacturers during the recession as GM and Chrysler went into Chapter 11 and the balance of the industry incurred huge losses. The relationship between the Big Three and the UAW actually have improved as the companies have paid bonuses to workers because of a profit recovery.

Opel remains caught in the jaws of an old business model. Labor has a substantial say in the operations of many of Europe’s car companies. But most of those firms, which include BMW, Mercedes and VW, have large sales bases outside Europe. Opel does not.

Opel’s near-term future will be determined by whether it can build a bridge to the new car manufacturing system. It is one in which union workers will lose jobs. But the jobs of those who remain will be relatively secure, because a restructuring will bring down the breakeven point of sales needed to make a profit. Without such a deal, Opel will continue to lose money. Large strikes against the company will make that worse and actually could cause the number of jobs eventually cut to soar. Opel does not have much to lose while it remains pressured by huge losses.

Douglas A. McIntyre

The strengths that Ammann cites could easily be turned against it. The first is that its market share and pricing are strong in the U.S. That has made it the primary target of the largest manufacturers — Ford (NYSE: F) and Toyota (NYSE: TM). Ford already has proved it can do well in the U.S., and has since GM and Chrysler went into Chapter 11. After two rough years, Toyota’s plants are back online at full production. The Japanese quake of last March had idled some of them. America’s number three U.S. car company, Chrysler, is now its fastest growing. That is another challenge to GM’s plans. Perhaps just as great a danger to GM is the success of several niche firms. These include BMW and Mercedes at the high end of the market and Hyundai and Kia in the mid- and low-priced segments.

GM also says it can rely on China, the world’s largest car market. That plan has two barriers. The first is that the growth of the market for cars and light vehicles in the People’s Republic has slowed. The other is the GM no longer just competes with other foreign car companies in China. Local firms want to take market share from GM and have begun to bring on the manufacturing capacity to do so.

GM’s Achilles’ heel is its EU operation, Opel. Opel has not made it through a restructuring the way GM has in the U.S. There is still a battle between GM’s money-losing unit and local unions. And some EU nations are anxious to make sure GM keeps jobs within their borders. GM has a union problem in Europe, and it also has a political one.

GM’s CFO would have been better off saying that GM is a world-class car company with a bright future and left it at that.

Douglas A. McIntyre

As we noted this morning, “The company said that fourth quarter pre-tax operating profit was $1.1 billion, or 20 cents per share, a decrease of $189 million from fourth quarter 2010. Ford has posted a pre-tax operating profit for 10 consecutive quarters. Revenue for the period was $34.6 billion up $2.1 from the year before’s quarter.”

Asia seems like a spot where Ford should not be weak on the surface, but again that was explained a in recent weeks (when CNBC accidentally called for a loss at Ford rather than a loss in operations in much of Asia due to the ongoing Thai flood issues). 

Our question is simple.  Can the dividend save Ford?  Ford was originally expected to reinstate its dividend at some point this year or even in 2013.  Unlike General Motors Co. (NYSE: GM), Ford is not under government restriction and it does not owe any bailout funds back to Uncle Sam.

New investors entering today will get a dividend yield of 1.5% now that shares are down 3.5% at $12.30.  Shares are still up handily in 2012 after closing at $10.76 on December 30.

The next boost is the coming replacement cycle here in the United States.  Maybe this is not as large of a growth market as Asia and Latin America, but the drastic age of the U.S. car fleet owned by Joe Public is the oldest it has been in our lives.  People can keep pouring a few hundred dollars here and a few hundred dollars there every few months to keep a clunker from clunking out, but eventually it is just cheaper to buy a new a car.

As long as the economy doesn’t fall apart rapidly, Ford’s dividend, the recovery after the Thai flooding, and the U.S. replacement cycle should all help Ford shareholders.

JON C. OGG

The company said that fourth quarter pre-tax operating profit was $1.1 billion, or 20 cents per share, a decrease of $189 million from fourth quarter 2010. Ford has posted a pre-tax operating profit for 10 consecutive quarters. Revenue for the period was $34.6 billion up $2.1 from the year before’s quarter

Ford reported fourth quarter net income of $13.6 billion, or $3.40 per share, an increase of $13.4 billion, or $3.35 per share, from the fourth quarter of 2010. This includes the favorable impact related to releasing $12.4 billion of the valuation allowance. Ford began to record a valuation allowance against net deferred tax assets in the third quarter of 2006, reflecting large cumulative losses incurred, as well as its financial outlook at the time. Consistent delivery over the past few years of strong improvement in the company’s business results now supports the release of almost all of the valuation allowance.

Total Automotive pre-tax operating profit in the fourth quarter was $586 million, a decrease of $155 million from fourth quarter 2010. The decrease is explained by higher costs, including higher commodity costs, higher compensation costs in North America related to the new UAW agreement (including the one-time ratification bonus), and unfavorable exchange rates. This was offset partially by favorable net pricing and volume and mix.

To be fully successful with numbers like this:

In the fourth quarter, Asia Pacific Africa reported a pre-tax operating loss of $83 million, compared with a profit of $23 million a year ago.

Douglas A. McIntyre

Read The Best-Selling Cars of All Time

The best-selling vehicles have several other notable features in common. For one, the majority were introduced just before or around the same time that gas prices began to rise rapidly in the early 1970s, primarily because of the Arab oil embargo. Car companies offered 4-cylinder, light and fuel-efficient cars that allowed people to drive without badly hurting household budgets. Many of these cars continue to sell well today as gas prices are relatively high around the world.

Many of these cars also are manufactured and sold around the world. The Beetle is sold in the U.S. and Europe. The Passat is built in both the U.S. and China. Several of the best-selling cars from Japan are sold in most major countries around the world. Once a car proved its appeal with consumers, it made economic sense for a manufacturer to use the same base chassis and engine at plants on different continents.

24/7 Wall St. looked at best-selling car data from a number of sources. The sources included major media outlets that cover the auto industry, research firms, and car companies that keep lists of their own best-selling cars.

This is the 24/7 Wall St.’s Best Selling Cars of All Time.

The U.S. market did not appear very attractive in 2008 when GM fell behind Toyota in global units sold. American sales had dropped from more than 16 million in 2005 to about 10 million in 2008. Toyota had nearly passed GM in the U.S. market. GM’s one advantage was that it was the top car company in China, which became the world’s largest market three years ago.

GM’s problems began to disappear as it left Chapter 11. Toyota had a run of bad luck about the same time. It recalled 8 million cars around the world for defects. It was wounded by production cuts due to the March earthquake in Japan. It lost the second spot in car sales in the U.S., but it still holds 12% of the American market based on 2011 numbers. VW had only 2.5% of U.S. sales. And, in America, VW has to face stronger U.S. car companies, a recovery of Japan’s auto manufacturers, and the rapid rise of Hyundai and its sister company Kia.

VW does well in China, where it trails only GM. But the increase in sales in the People’s Republic last year was slower than in the U.S. China has been viewed as the market that would make or break the largest global manufacturers. That is no longer entirely the case.

VW’s stronghold is still Europe. The market there is contracting, though, because of financial problems and a recession that has damaged some of VW’s key markets. It has to make up for those difficulties somewhere. America is the most likely region to help it do that. VW does not have the models, distribution or brand awareness it needs to drive its American market share much higher.

VW lost its one chance to be a leader in the U.S. car market. It could have taken the risk to buy troubled Chrysler. Instead, it left that risk, and eventual reward, to its modestly successful rival Fiat. It has paid a price for that. It will continue to do so. VW has no way to  succeed in the suddenly thriving U.S. market.

Douglas A. McIntyre

Toyota Motor Corp. (NYSE: TM) has said it expects to report total 2011 sales of 7.9 million units, a drop of about -6% from 2010. Toyota’s sales were hit hard by the devastating earthquake and tsunami that hit Japan last March. The Japanese car maker will actually finish in third place, behind Germany’s Volkswagen AG, which had sales of 8.2 million units. Ford Motor Co. (NYSE: F) sold 5.3 million units in 2011, a gain of nearly 7% over 2010 sales.

GM and its joint venture partners sold 2.55 million units in China, while the company’s US sales totaled 2.5 million. Sales of the company’s Chevrolet branded cars and light trucks totaled 4.76 million units worldwide, of which 1.78 million were sold in the US and nearly 600,000 units in China.

Toyota’s 2012 sales are expected to pick up again as the company has worked through most of the supply problems it faced following last year’s disaster. The company could sell as many as 8.6 million units this year. Volkswagen faces a stiff challenge to growth given the expected weakness in the European market. GM’s Opel division could face some of the same challenges, but GM’s growth is likely to continue in 2012.

GM’s shares are up about 1.25% at $24.82, in a 52-week range of $19.00-$38.95.

Paul Ausick

While we have some valuation concerns on SIRIUS and while we have some concerns about the future of some of the satellite radio’s top media figures posing a talent departure risk, the news this week that the entire United States car fleet is at a record age is helping to drive Sirius XM bulls.

The same argument can be made for Pandora Media, Inc. (NYSE: P), and that can also be a threat to Sirius XM, but so far this remains a wild card.  Pandora’s stock is still at only about half of its post-IPO peak in 2011 even though it has managed to score several key auto-maker option pacts ahead of the Consumer Electronics Show.

Ford Motor Co. (NYSE: F) and General Motors Company (NYSE: GM) also have a huge opportunity ahead.  Ford has even reinstated its dividend sooner than expected.  Car buyers are not ramping up hybrid buying due to cost, but many of the new cars sold will in fact be Sirius XM subscribers.  Some may even be Pandora subscribers.

Last night Jim Cramer even talked up the auto parts sector on CNBC’s MAD MONEY because of the coming car sales boom.  It turns out that even the most frugal of the frugal can only drive an old car for so long.  Eventually, the cost of maintenance and repairs exceeds the cost of a new car even if the car is not quite what a buyer would prefer to drive.  After all, what good is it to have a car with a $30,000 new sticker price  that is 80% or 90% devalued for trade-in if you have to keep putting in $200 to $500 every three months in repairs and band-aid work?

SIRIUS shares closed out 2011 at $1.82, and now shares are up 18% even though today’s $2.15 price is a tiny loss.  Here are some year-to-date comparisons for 2012 so far: Pandora is up 29.5% YTD,  Ford is up almost 17% YTD, and GM is up 21% YTD in 2012.

JON C. OGG