SIRIUS Guidance Fails To Score (SIRI)

SIRIUS XM Radio (NASDAQ: SIRI) updated its earnings guidance now that the company has started its merger integration.  There is news in here for the bulls and bears alike.  The company is raising expectations to $425 million for its 2009 synergies.  All of this data is the updated information and is being given at the Merrill Lynch Media Fall Preview Conference out in Marina del Ray, California.

Here are the key guidance factors:

• SIRIUS is now projecting its subscriber count to be 19.5 million for2008 and sees 21.5 million subscribers at the end of 2009. 
• It islooking for pro forma revenues of $2.4 billion in 2008 and $2.7 billionin 2009. 
• It is reiterating adjusted EBITDA $300 million for 2009…. But itsees an adjusted EBIDTA loss of $350 million in 2008.

As far as the"Best of Both" content, Mel Karmazin outlined what he willbring over.  As far as SIRIUS on XM, it is taking Howard Stern, MarthaStewart, NFL, NASCAR, and Playboy.  As far as XM content onSIRIUS, it is taking over NBA, NHL, PGA, and College sports, alongwith Oprah, The Virus, and Bob Edwards.

Investors didn’t receive this data with exactly the most open arms.Shares are down over 5% at $1.19 today and have traded as low as$1.15.  We have also seen more than 37 million shares trade hands. The prior 52-week trading range was $1.22 to $3.94.  You wouldthink with a tight consumer and a weak as hell auto market in the U.S.that much of this would have already been anticipated.  But the oneissue that the company didn’t make discuss is when it will become profitable.  This also hasn’t given any details regarding its recentsecurity sales nor  has finalized its financialrestructuring needs.  If it hasn’t yet it is likely close to that, butinvestors here are wanting more as there is a huge overhang on the lastbig convertible price.

Jon C. Ogg
September 9, 2008