Panamsat Holdings Corp. capped off the two-week period leading up to press time for this issue of Satellite News closing at a two-week high of $17.50 per share. The stock has been inching up toward its IPO price of $18 per share in recent weeks and the next significant moment for the company will come May 16, when the company announces its first quarter results. That conference call should set the stage for what the financial community can expect from Panamsat going forward. Company CEO Joseph Wright told Satellite News during an interview at last month’s National Association of Broadcasters annual conference that, under his leadership during the previous time when Panamsat was publicly traded, the company did not miss its earnings guidance. Maintaining that streak now will go a long way to boosting the value of this stock.

And as we ponder how the company’s financials will look while we wait for May 16 to arrive, we get a sense of what at least one Wall Street firm thinks about the stock. Morgan Stanley, on April 26, initiated coverage of Panamsat and, in an equity research released that day, set the price target for Panamsat at $21 and an overweight rating (meaning the stock’s total return is expected to exceed the average total return of that analyst’s industry coverage universe, on a risk-adjusted basis, throughout the next 12-18 months).

Morgan Stanley reiterated points made by Wright in his interview with Satellite News last issue (SN, April 25) about Panamsat stock being a combination of a value stock with growth potential, noting the stock’s “current nine percent dividend yield with three to four percent revenue growth through 2009 driven by capacity sales for high definition programming in the United States and sales to the U.S. government and its affiliates.” The stock gained a noticeable boost in its share price on the day the report was issued, closing at $17.47, up from $17.35 the previous day and ending up this latest two-week window at the above mentioned high.

SIRI, XMSR

Once again, we look back at the satellite radio market to see how those stocks are doing. Last week, both Sirius Satellite Radio and XM Satellite Radio released their first quarter results. Both companies added more that 300,000 net new subscribers suggesting the satellite industry is doing well in terms of signing on new customers. Both companies showed revenue growth compared to their respective first quarter 2004 results (Sirius reported revenues of $43.2 million in the first quarter compared to $9.3 million in 2004; XM reported revenues of $102.6 million in the first quarter, up from $43 million reported during the first quarter of 2004).

Sirius reported subscriber acquisition costs was $190 per gross subscriber in the 2005 first quarter, down from $248 in the same period a year ago. For XM, cost per gross addition dropped to $90 during the first quarter, which ended March 31, from $106 in the first quarter of 2004. Even though both dropped, Sirius’ number is significantly higher. The other indicator is the bottom line. XM managed to reduce its net loss for the first quarter to $119.9 million for the first quarter of 2005, down from a $170.1 million net loss in the 2004 first quarter, while Sirius’ net loss grew to $193.6 million in the 2005 first quarter, up from a loss of $144.1 million in the 2004 first quarter. Wall Street analysts generally viewed the results for both companies as strong, however the markets reacted a little differently. XM closing the last two-week period at $27.25 (after hitting a two-week high of $28.35 on April 27), slightly lower than where it began at $27.50. Sirius, however, ended the two-week period at $4.73, down from where it began at $5.15, but recovering from a two-week low of $4.67 on April 27.