This Week in Sirius XM Radio

Satellite radio is always on the move with Sirius XM.

Apr 27, 2014 at 11:30AM

Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (NASDAQ:SIRI) moved lower on the week, slipping 0.6% to close at $3.12. The move was in line with the Nasdaq's 0.5% slide. 

There was more going on beyond the share-price gyrations, though. Sirius XM posted quarterly results, and so did Pandora (NYSE:P). Meanwhile, an industry report suggests that Beats Music isn't off to such a hot start.

Let's take a closer look.

As the world earns
It's earnings season, and Sirius XM held up reasonably well. Its profit for the first quarter matched the $0.02 a share Wall Street was forecasting, and revenue growth of 11% to $997.7 million was just ahead of the $994.6 million analysts were forecasting.

The subscriber number clocked in at 25.8 million, 6% ahead of a year earlier. That was also a sequential uptick, showing that the sequential dip during the holiday quarter was just a fluke. Self-pay subscribers also gained ground during the period. 

The report wasn't perfect. Sirius XM failed to raise at least some component of its full-year guidance during the first quarter for the first time in three years. Its conversion rate also remained at a historical low 42%. Despite the scalable nature of this model, Sirius XM's operating profit barely nudged higher.

It was still an overall solid report, and the stock did close higher on the day it reported.  

Pandora checks in
Pandora reported quarterly results a few hours after Sirius XM. Adjusted revenue soared 54%, and its quarterly deficit narrowed. 

Pandora shares still tumbled 17% on Friday in response to the report. The rub this time was Pandora's guidance, calling for decelerating growth. The leading music-streaming service sees revenue checking in between $213 million and $218 million this quarter, missing Wall Street's target of $219.3 million.

That may not seem like the kind of miss that would trigger such a negative reaction, but after seeing Pandora's stock nearly triple last year, it's safe to say that expectations were high.

And the Beats goes on
Beats Music launched with a lot of hype back in January. Reality has been singing a different tune. Beats is an iconic brand in audio entertainment as a result of its flagship headphones and star-studded backers, but it's not so easy to get folks to pay $10 a month for music.

Billboard leans on record-label sources that believe Beat Music has just hundreds of thousands of premium subscribers. Given the kind of ad spending and media buzz that was generated three months ago, that's not going to be enough to make Beats Music a serious contender here.    

The biggest thing to come out of Silicon Valley in years
Satellite radio isn't the only cool gadgetry out there. If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of the consumer electronics giant's engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now, for just a fraction of the price of its stock. Click here to get the full story in this eye-opening new report.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Pandora Media and Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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