If you want someone to help you put lipstick on your pig, call the guys at XM Satellite Radio (NASDAQ:XMSR). These are people who know how to accentuate the positive, to put it delicately.

For Q3, XM's revenues soared 134% to $153 million. That sounds pretty good, which of course is why they lead with that figure in the earnings release. The payoff for investors, or lack thereof, comes further down, in smaller letters.

Despite the big revenue win, XM actually lost even more money this quarter than it did in last year's Q3. The red ink totaled $131.9 million, compared to a negative $118 million in the prior-year quarter.

Let's put those numbers together, just so we can see them in full relief. People handed XM $153 million dollars. XM took that money, spent it all, and then spent nearly that much again.

Here's how you do that: You increase your cost of revenue by 119%, for a total of $105 million. And then you up your other operating expenses by another 34%. If that seems reasonable, given that revenues were up a lot more, consider that the operating expenses outside of cost of revenues were still more than revenue. Then you pay interest, other expenses, and you end up with negative $131 million. Oh, and after that, you spend another couple million on B and C preferred-stock dividends.

While XM retains a subscriber lead over Sirius Satellite Radio (NASDAQ:SIRI) and has a smaller market cap, there's no doubt in my mind that both of these are hold-your-nose and hope investments. The promise is that eventually the revenues climb so high that fixed costs scale and profits show up. In practice, that's still an awfully long way off, and there are no guarantees that costs will be contained once they get there.

With car sales in the tank at GM (NYSE:GM) and other automakers, I wonder if future subscription wins are going to be so easy to get. Satellite radio proponents tend to think that just about everyone is going to want to pony up $13 a month to listen to this stuff, but I'm not so sure that it's the Borg they think it is. Podcasting via Apple's (NASDAQ:AAPL) runaway hit iPod is one of the paradigm-busters that I suspect will eventually creep in on satellite radio's game.

I wouldn't argue the potential if these firms were trading cheap, but XM is already valued at $6.2 billion, and Sirius is going for $7.8 billion. There are profitable businesses out there with millions of customers that don't command that kind of market cap.

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Seth Jayson thinks satrad is way cool, but he's not paying up for it, and that tells him something. At the time of publication, he had positions in no company mentioned here. View his stock holdings and Fool profile here. Fool rules are here.