The Driving Force Behind Record Earnings at Sirius

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Sirius XM Holdings Inc. (NASDAQ: SIRI) reported its fourth-quarter financial results Thursday before the markets open. The satellite radio giant had $0.03 in earnings per share (EPS) and $1.09 billion in revenue, against Thomson Reuters consensus estimates of $0.02 in EPS and $1.08 billion in revenue. In the fourth quarter of the previous year, Sirius posted $0.01 in EPS and $1.00 billion in revenue.

The company gave guidance for the 2015 full year. Net subscriber additions are expected to be approximately 1.2 million and revenue is expected to be $4.4 billion. There are consensus estimates of $0.12 in EPS and $4.48 billion in revenue.

The fourth quarter was marked by strong net subscriber gains. Sirius recorded 576,689 net new subscribers in the fourth quarter, making this the largest fourth-quarter increase since 2007. Self-pay net subscriber additions were 508,032 in the fourth quarter of 2014, compared to 411,484 in the fourth quarter of 2013.

The company reported the highest quarterly EBITDA in its history this quarter. EBITDA came in at $381 million, an increase of 17% over the fourth quarter 2013.

Free cash flow reached a fourth quarter record of $331 million, up 20% from the fourth quarter of 2013.

Over the course of 2014, the company repurchased 739 million shares, roughly 12% of shares outstanding at the beginning of last year. A total of $2.5 billion was returned to shareholders.

Jim Meyer, CEO of Sirius, said:

As our results demonstrate, SiriusXM had a great year by delivering to subscribers new and exciting music, sports, and talk programming; executing on our growth plan; and driving 36% growth in free cash flow per diluted share, all while investing in the future of the connected car.

Sirius shares were up 1% at $3.65 in premarket trading, following the release of the earnings report. The stock has a consensus analyst price target of $4.27 and a 52-week trading range of $2.98 to $3.66.