Sirius Upbeat About Subscriber Base Growth

Sirius XM Radio (NASDAQ:SIRI) is at an all-time high number of subscribers, who also appear to have taken the price hike the satellite-radio operator introduced at the beginning of the year fairly well.

Sirius added 404,596 subscribers during the first quarter to be at 22.3 million at the end of the three months, an 8.4 percent increase from the period a year earlier. The additions were way more than had been predicted, with analysts agreeing on an average gain of about 200,000. The company had increased the price of its basic package to $14.49 a month from $12.95 earlier in the year.

As a result, earnings grew 38 percent, with a profit of $107.7 million, or 2 cents a share, up from $78.2 million, or 1 cent, a year earlier. Revenue grew 11 percent to $804.7 million. Predictions had been of earnings of 2 cents on revenue of $804 million.

A Closer Look: Sirius XM Radio Earnings Cheat Sheet>>

“SiriusXM is starting the year with tremendous operational momentum,” chief executive Mel Karmazin said in a statement. “We grew subscribers faster than any first quarter since our 2008 merger of Sirius and XM, and we improved our self-pay monthly churn rate to 1.9 percent despite implementing a price increase at the beginning of the year.”

The company, which competes with Pandora Media (NYSE:P), is now expecting to add 1.5 million subscribers in this fiscal, up from a previous forecast of 1.3 million. A further boost is expected to come from better auto sales, with Sirius now selling its radios on 67 percent of new cars in the country. It expects to generate $3.3 billion in full-fiscal revenue.

Karmazin is expecting the good mood to last as the radio rolls out additional content. “Our number one focus is on delivering the best possible content to our subscribers – we are rolling out more satellite channels via factory-installed 2.0 radios, and we are improving our online offering by delivering even more live sports coverage, updated apps with enhanced features, and later this year, on-demand content and personalized radio,” he said.

Shares dropped 2.26 percent this week to $2.16. The stock is up 18.68% percent this year through Friday.