Sirius Is No Joking Matter

Well played, Sirius (Nasdaq: SIRI  ) . The fast-growing satellite radio provider disappointed only the bears with this morning's second-quarter report. With revenue and subscriber counts growing at 51% and 53% respectively, the company's loss was nearly halved to $0.09 per share.

Sirius gained 561,493 net new subscribers during the three months, beating the 338,000 that rival XM Satellite Radio (Nasdaq: XMSR  ) landed during the same period. It is the seventh straight quarter that Sirius has attracted more net new subs. Yes, a lot of that is the result of XM's older, established base of satellite-radio users that are up for renewal. However, Sirius is still landing slightly more gross subscriber additions than the rival it is bent on merging with.

The end result is that XM and Sirius combined to close out the quarter with 900,000 more subscribers than at the start. That is impressive, even if most of the subscribers are coming from new-car buyers with factory-installed satellite radio receivers. They are unlikely to be as passionately loyal as those who make a series of choices before arriving at a Best Buy (NYSE: BBY  ) or Circuit City (NYSE: CC  ) to buy a receiver at the retail level.

It's not all peaches and streams. The average monthly subscription revenue per user is lower than it was a year ago. The same goes for advertising revenue. However, Sirius is keeping its expense growth in check. If XM and Sirius are allowed to merge, the savings will be substantial. On a day when Apple (Nasdaq: AAPL  ) announces that it has sold more than 3 billion songs through its iTunes store, it's hard to fathom the anti-merger argument that an XM-Sirius union would corner the market on premium aural content.

No, Sirius is no joking matter anymore.

Tune into Foolishness:

Best Buy is a Stock Advisor selection. Learn more about our flagship stock-research offering with a free 30-day trial subscription.  

Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He does not own shares in any company mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 532966, ~/Articles/ArticleHandler.aspx, 10/25/2016 1:43:37 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,182.93 -40.10 -0.22%
S&P 500 2,144.48 -6.85 -0.32%
NASD 5,285.34 -24.48 -0.46%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 1:28 PM
SIRI $4.18 Down +0.00 +0.00%
Sirius XM Radio CAPS Rating: **
AAPL $117.83 Up +0.18 +0.15%
Apple CAPS Rating: ****
BBY $39.21 Down -0.25 -0.63%
Best Buy CAPS Rating: *
CC.DL2 $0.10 Down +0.00 +0.00%
Circuit City Store… CAPS Rating: *
XMSR.DL $0.00 Down +0.00%
XM Satellite Radio CAPS Rating: No stars