Sirius Rises on Record Quarter

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Sirius XM Holdings Inc. (NASDAQ: SIRI) released its second-quarter earnings report Tuesday before the markets opened. The company had $0.03 in earnings per share (EPS) on $1.12 billion in revenue versus Thomson Reuters consensus estimates of $0.03 in EPS on $1.12 billion in revenue. The second quarter from last year had $0.02 in EPS on $1.04 billion in revenue.

The company gave guidance for the 2015 full year. Sirius expects: net self-pay subscriber additions of about 1.6 million; total net subscriber additions of approximately 1.8 million; and revenue of roughly $4.5 billion. There are consensus estimates of $0.11 in EPS on $4.49 billion in revenue.

The company added 692,000 net new subscribers in the second quarter, a 46% increase from the same period of the previous year. Self-pay net subscriber additions were 519,000 in the second quarter compared to 380,000 in the previous year. Total paid subscribers reached 28.4 million, and self-pay subscribers reached 23.4 million, both record highs.

During the second quarter, the company repurchased 144 million shares for $560 million.

Jim Meyer, CEO of SiriusXM, said:

After another quarter of exceptional execution and subscriber growth, we are increasing our subscriber guidance for the second time this year to approximately 1.8 million net additions. We are also increasing guidance for revenue, adjusted EBITDA and free cash flow. Self-pay net additions of 519,000 were the strongest second quarter result since 2007, and our quarterly self-pay churn rate of 1.6% was outstanding. The economy continues to get stronger, our execution has never been better, and demand for our differentiated content bundle remains very high.

Free cash flow was $371 million for the quarter and was up 11% from the second quarter of 2014. At the end of the quarter, Sirius had cash and cash equivalents of $294.1 million compared to $147.7 million at the end of 2014.

Shares of Sirius closed Monday down 1% at $3.84 on a 52-week trading range of $3.14 to $4.04. In early trading indications shares were up 2.6% at $3.94. The stock has a consensus analyst price target of $4.46.