XM Reports Gains Before It Gets Sirius

Feb 27, 11:52 AM

Current Headlines: By Matthew Barakat THE ASSOCIATED PRESS

McLEAN, Va. -- XM Satellite Radio Holdings Inc., which last week announced plans to combine with rival Sirius, said Monday that a 45 percent jump in revenue and a tighter leash on marketing costs helped narrow its fourth-quarter loss.

The Washington, D.C.-based company, which has never reported a profit, said it lost $263.1 million, or 90 cents per share, after paying preferred dividends in the final three months of 2006. That beat a loss of $270.4 million, or $1.22 per share, a year ago.

The fourth-quarter loss includes a one-time charge of $57.6 million to reflect the declining value of XM's 23 percent stake in Canadian Satellite Radio. Excluding that one-time charge, XM lost 70 cents per share, a penny better than the consensus estimate of Wall Street analysts surveyed by Thomson Financial.

XM shares fell 17 cents, or 1.13 percent, to close at $14.93 on the Nasdaq Stock Market.

Quarterly revenue increased to $257 million from $177 million a year ago.

XM finished the year with 7.6 million subscribers, a 29 percent increase from a year ago, when it had 5.9 million. But XM had predicted at the beginning of 2006 that it would have 9 million subscribers at this point.

Subscriptions slowed as smaller competitor Sirius, which added Howard Stern to its programming lineup, took an increasing share of the market.

For the year, XM lost $732 million, or $2.70 per share, compared with a loss of $675 million, or $3.07 a share, in 2005. But annual revenue increased 65 percent to $933 million from $558 million in 2005.

A week ago, XM Satellite and New York-based Sirius Satellite Radio Inc. announced a deal to combine their operations. The companies bill the deal as a merger of equals, but to make it happen Sirius will be giving $4.57 billion of its stock to XM shareholders.

First, though, the companies must gain approval from the Federal Communications Commission.

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