S&P Helped XM & Sirius After XM Earnings, Sort Of

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By Douglas A. McIntyre Published
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Both XM Satellite Radio (XMSR-NASDAQ) and Sirius Satellite Radio (SIRI-NASDAQ) managed to post large gains on the day after XM reported this morning.  Standard & Poor’s is Maintaining its "3 STARS" (HOLD) rating on XM Satellite Radio (XMSR).  This was by S&P’s Tuna Amobi, who regularly appears on CNBC.

S&P sees multi-year ramp up of installation in OEM automotive units (GM, Honda, Nissan, Toyota), versus a dip in conversions and more retail weakness. XM affirms 9.0 to 9.2 million subscribers for 2007 and sees $111-$114 cost per subscriber (above prior forecast of $108), and expects a $170-$180 million adjusted operating loss vs. $166 million, but positive 2008 EBITDA. With potentially formidable odds against regulatory approval of merger with Sirius (SIRI), S&P is keeping its 12-month target price at $13.00.  Before a one-time loss S&P had estimates at 1 cent per share, thecompany’s first quarter loss per share of -$0.39 vs. a -$0.55 a yearearlier; but these are different than how we track our earnings reports.  This was in line with S&P and Wall Street estimates.

The verdict is still out on XM-Sirius as far as a merger, but both shares closed up on the day.  There is still a whole lot of calendar between now and whenever this gets decided.  XMSR closed up almost 7% at $11.78 after earnings on almost 15 million shares; SIRI shares closed up 4.6% at $2.96 in conjunction.

Jon C. Ogg
April 26, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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