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XM Rocks And Rolls With New Subs

By | October 4, 2004

      Wall Street analysts are offering a consensus estimate that Washington, D.C.-based XM Satellite Radio [XMSR] will pre-announce that it amassed in the neighborhood of 430,000 third-quarter net new subscribers. That pace of growth in the traditionally slow fourth quarter would put the company on course to notch at least 3.1 million subscribers by year’s end.

      Distribution channels indicate that XM will achieve another solid quarter of growth, according to a research note last Thursday from Bear Stearns. The feedback gathered in doing such checks indicates XM has been able to addition subscribers in big numbers while managing its costs effectively.

      Alden Mababir, a satellite radio analyst with the boutique New York City firm Vintage Research, said growth drivers for XM during the third quarter appear to include increased volume from its original equipment manufacturer automobile partners, especially General Motors [GM]; improved in-store equipment inventories; and small seasonal gains from the traditionally weaker second quarter. He predicted XM might start to spend a little more money on marketing to counter rival Sirius Satellite Radio’s [XMSR] “NFL Sunday Drive” football programming. However, XM may still be able to keep its costs relatively low, he added.

      (Bob Peck, Bear Stearns, 212/272-6665; Alden Mahabir, Vintage Research, 646/472-5216)

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