Sirius, XM post higher revenues but deal still in limbo

Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. reported gains in first-quarter revenues and subscribers Monday, but no definitive word on when their deal to combine might close.

Sirius announced an agreement to acquire XM in February 2007, and received antitrust clearance from the Department of Justice in March.

But the deal, valued at about $4 billion, is still waiting for approval from the Federal Communications Commission, which could impose conditions on the acquisition before it closes.

Sirius's CEO Mel Karmazin expressed frustration to investors and analysts on a conference call Monday about the long delay in the regulatory approval process, but said that the company would work "constructively" with the FCC. However he also said Sirius was prepared to go it alone should the deal fall apart.

However he also indicated they are prepared to go it alone should the deal fall apart.

XM, which is based in Washington, posted a loss of $129.3 million, or 42 cents per share, compared with $122.4 million, or 40 cents, a year earlier. Revenue rose 17 percent to $308 million.

XM finished March with 9.33 million subscribers, up from 7.9 million a year earlier, while Sirius ended the same period with 8.6 million subscribers, compared with 6.6 million in the same period a year earlier.

Nearly all of the subscriber growth for both Sirius and XM now comes from factory-installed car radios, as opposed to receivers purchased separately by the consumer at retail.

In the last 12 months, XM's factory-installed subscriber base increased 36 percent to 3.9 million, while the retail market increased just 1 percent to 4.5 million. The rest of XM's subscriber base comes from smaller categories such as subscriptions held by rental-car companies.

Investors appeared to be encouraged by a higher "conversion rate" in factory-installed customers. XM said 53.3 percent of car buyers with pre-installed radios paid for service after their free trial expired, compared with 51.5 percent a year ago.

XM's stock finished up 50 cents or 4.2 percent to $12.30, while Sirius's rose 14 cents or 5.1 percent to $2.87. XM reported results in the morning, while Sirius announced after the market closed.

Sirius had some good financial news of its own, reporting a narrower loss of $104.1 million, or 7 cents per share, and less than the year-ago loss of $144.7 million, or 10 cents per share.

Revenue rose 33 percent to $270.4 million.

Sirius also posted healthy subscriber gains, with just under 4 million factory-installed car customers in the latest period, compared with 2.3 million in the same period a year ago. Retail subscribers rose less sharply, to 4.6 million from 4.2 million.

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AP Business Writer Matthew Barakat contributed to this story from McLean, Va.