Earnings Cheat Sheet: Sirius XM Issues Optimistic Outlook for Satellite Radio

Since the merger, Sirius XM (SIRI) has become a more fierce competitor in the radio market. The company provides a programming lineup of approximately 135 channels of commercial-free music, sports, news, talk, entertainment, and traffic and weather. It distributes satellite radios for use in cars, trucks, homes, offices and boats. Here’s the third quarter earnings breakdown for Sirius XM Radio:

Earnings: Sirius reported a third-quarter net income of $67.6 million, or $.01 per share, swinging from a year-ago loss of $151.5 million, or ($.04) cents a share.

Revenue: Increased 15% to $722 million, from $618.6 million in the same period a year ago.

Actual versus Wall Street Expectations: Analysts polled by Thomson Reuters were expecting Sirius to earn $0 per share and revenue of $719 million. Sirius XM edged past analysts by a penny on earnings and a few million to the upside on revenue.

Notable Stats: Sirius XM added 334,727 subscribers in the July-September quarter, up from additions of only 102,295 in the same period last year.

The company ended the quarter with  19.9 million subscribers, up 1.3 million from the same time last year.

Sirius XM said it now expects adjusted revenue for 2010 will exceed $2.8 billion.

Did You Hear That? Mel Karmazin, Chief Executive Officer of SIRIUS XM, said “Today, satellite radio has gained share against terrestrial radio to constitute roughly 15% of the total radio revenue market…At this time, we expect adjusted revenues to exceed $2.8 billion and free cash flow to exceed $150 million. We believe we are stronger than ever and getting stronger, and are very excited to be in a position to soon pass 20 million subscribers.”

Commentary: Shares of SIRI are up 150% since the start of 2010. Once a penny stock, the company has defied all the naysayers and rebounded with tremendous growth. The beginning of September marked an upside rise for shares above the 50-day moving average. Shares have spent the entire year above the 200-day moving average. SIRI turned a profit this quarter and also delivered double-digit revenue growth, both positive catalysts for shareholder excitement. With the Howard Stern deal looming on the table, let’s wait-and-see what’s next for the satellite radio giant.

Disclosure: No position held in SIRI