SIRIUS & XM Focus: Merger Or Earnings? (XMSR, SIRI)

February 22, 2008 by Douglas A. McIntyre

Next week we are getting dual earnings reports out of Sirius Satellite Radio (NASDAQ: SIRI) and from XM Satellite Radio (NASDAQ: XMSR).  We are also waiting for a Department of Justice approval decision, and frankly many signs had pointed to a decision coming this week.  Oh well, that’s the government for you.

On Tuesday we’ll get to see earnings out of Sirius Satellite Radio Inc. (NASDAQ: SIRI). The estimates for the satellite radio company from First Call are -$0.13 EPS on $267.4 million in revenues.  Next quarter estimates are -$0.08 EPS on $280.23 million in revenues. Estimates for fiscal 2008 are -$0.30 EPS on $1.25 billion in revenues. Analysts have an average price target north of $3.00. Sirius Satellite Radio Inc.’s 52-week trading range is $2.51 to $3.94.

Next Thursday we’ll get to see earnings out of XM Satellite Radio Holdings Inc. (NASDAQ: XMSR). The estimates for the satellite radio company from First Call are -$0.64 EPS on $303.15 million in revenues.  Next quarter estimates are -$0.39 EPS on $314.98 million in revenues. Estimates for fiscal 2008 are -$1.62 EPS on $1.36 billion in revenues. Analysts have an average price target north of $14.00.  XM Satellite Radio Holdings Inc.’s 52-week trading range is $9.62 to $16.44.

We’ll break these earnings down more over the weekend or shortly before earnings.  If the government wants to throw a curve ball to Wall Street, it will announce its ruling on the merger on one of the earnings days or in between.  Over the last 90 days, SIRI shares are down some 15% or more and XMSR shares are down a slight bit less. 

Jon C. Ogg
February 22, 2008