Posted on 02/16/2006 2:06:45 PM PST by iPod Shuffle
| Washington Business Journal - February 16, 2006 http://washington.bizjournals.com/washington/stories/2006/02/13/daily20.html |
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XM Satellite Radio reported sales increases and much higher losses for the fourth quarter several days after director Pierce Roberts Jr. resigned and warned of a "crisis."
The D.C. company's stock price fell 5 percent, or by $1.27, to close at $23.98 Thursday.
The broadcaster generated fourth-quarter sales of $177.1 million, compared with $83.1 million a year earlier and 2005 sales of $558.3 million, compared with $244.4 million in 2004.
Losses widened in the fourth quarter to $268.3 million from $188.2 million in the same period a year earlier. Full-year losses rose to $666.7 million from $642.4 million in 2004.
Roberts said he had raised concerns "in an increasingly vociferous manner" to senior executives without effect.
"There is, in my view, a significant chance of a crisis on the horizon. Even absent a crisis, I believe that XM will inevitably serve its shareholders poorly without major changes now," he wrote in a Feb. 13 resignation letter that the company released Thursday in filings with the Securities and Exchange Commission.
XM (NASDAQ: XMSR) said in its filing that it believes the disagreement with Roberts primarily relates to differences over the strategic balance between growth and profitability. The company said Roberts had argued for lower marketing, programing and promotional expenditures for several years now.
The company reported that customer acquisition costs increased slightly to $64 in 2005 from $62 the year before.
XM finished 2005 with 5.9 million subscribers, having added 898,000 new subs in the fourth quarter, and surpassed the 6 million subscriber mark in the first week of January. XM added more than 2.7 million subscribers in 2005.
The company projects subscription revenue of more than $860 million in 2006, or an almost 55 percent increase. The company said it would achieve positive cash flow from operations by the end of 2006. The broadcaster ended 2005 with $711 million in cash and cash equivalents.
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Gee. Which dog shall I pump my money into? Overinflated real estate speculation? Or overinflated tech stocks?
Bought this baby at like $3.00 or something and sold two a three weeks ago...did ok.
Geeze, that's not good.
I really like XM radio (I have 2)... I thought they were supposed to be coming close to breaking even.
Hope they can make it in the long run.
At least they aren't wasting a half billion dollars on that juvenile jerk Howard Stern.
If the contract that Stern inked with Sirius is even close to being accurate, can someone explain to me how they can possibly turn a profit even in the long run?
667... Neighbor of the Beast.
Not chump change
Seems like a STERN warning!~}
They are counting on the millions of stern fans to get sirius. I have sirus (2 sets) I like it. I listen to Mike Church, Jerry Doyle, Laura Ingrham, Tammy Bruce etc... They have more sports than XM... I like sirius so far...
Also sounds Sirius . . .
$666.7M... negative return on investment of the Besat.
Besat = Beast. I R SPESHUL
I love my XM for the variety and lack of commercials on the music channels ... but they make up for that on the News/Talk channels. It's worse than network TV.
Stern was given $500M....a typical sat subscriber is thought to be worth about $500 total to the company....if Stern brings in 1M new subs, then his contract is paid for.
I'm sure that he has brought in 1M new subs (and SIRI must be as well, as they gave him the stock bonus). All in all, not that bad of a deal for SIRI (if, that is, they can keep from going BK).
Hard to imagine a satellite radio co. needs over a billion $ a year just to keep the lights on.
I predict they'll start selling ads in 2-3 years. Remember when cable TV had no ads?
That was for this year. What about next year? Do you think another 1 million will sign up? I think Stern got the bulk of his listeners off the bat. Do you disagree?
Absolutely agree.
His total contract was $500M....so he has already paid off. Heck, look at the publicity that SIRI gets out of the deal.
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