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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I will have to check it out.
But to inject some perspective here. At this juncture, the game is not about making profits, yet. It's about establishing dominance in the industry space so that eventually it will be profitable. Most new industries don't see profits for awhile, it doesn't necessarily mean the industry itself isn't viable. Taking heavy losses upfront is just the price of freight to gain ultimate market dominance.
bookmk ping
I felt the same way when I bought my first vehicle with XM. But as someone who travels a lot I have had a change of heart. If you drive long distances through numerous radio reception areas you come to really appreciate SatRad.
I agree completely. I have XM in my Tahoe and love it, but I really liked the old digital music channels on DTV better.
One of the post above was by a lady who lives in an area underserved by radio. I can sort of understand that, but I'd used internet radio instead.
I've never had problems with my scan button when I've been on the road.
I just can't see sending someone money each month just so I could listen to something that's free all around me.
FREE is my favorite price!
"Sirius was headed towards penny stockland without Stern"
Actually once past the initial spurt of activity about him when it was announced in 2004, it's been heading in that direction again. He started broadcasting with them Jan 1
http://finance.yahoo.com/q/bc?s=SIRI&t=3m&l=on&z=m&q=l&c=
"Well, looks like Sirius has just reported a loss of a little less than half of what XM did "
When one of them finally goes belly-up, will the other be able to keep going even after sucking up all the subscribers from the corpse, or will it simply slow down their own demise ?
( but I suppose they can cut costs by not renewing Stern and Oprah )
So you have to be sirius to be stern?:)
"I listen to Mike Church, Jerry Doyle, Laura Ingrham, Tammy Bruce etc"
I also like the classic rock channels and the New York DJ's.
I also like area33, sirius 66,67 =) 67 rox...
No, XM's $667M loss was for all of 2005, while Sirius' $311M loss was for just Q4. XM lost $270.4M in Q4. Sirius lost more.
Aint' that the truth! Gawd they get those repetitive XM other-channel ads stuck in my head! I only listen to Britt on FNC, but wow that's annoying. And to boot, I ALREADY SUBSCRIBE! Why are they advertising themselves?!?!?
....If they want to try to hook you on other channels you haven't listened to, why don't they, during the commercial....cut to another random LIVE channel instead if they want to make you aware of other channels.
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