Merger or not, at least Sirius (Nasdaq: SIRI) is starting to think like a stand-alone company.

The satellite radio provider hacked away at its fourth-quarter overhead, pruning away at its subscriber acquisition costs, marketing expenses, and stock-based compensation. Despite posting a 29% revenue spurt to $249.8 million, total expenses actually fell during the period. The end result was a much narrower loss than the market was expecting, clocking in at a deficit of $0.11 a share after the company posted a loss of $0.17 a share a year earlier (Sirius also improved its financial performance during the third quarter).

It's not all good news, of course. You don't take a weed whacker to your line items and expect to walk away unscathed. Revenue growth fell short of the 38% uptick that Wall Street was expecting.

With 8.3 million subscribers, Sirius is still a growth story. The difference is that it has become less of a retail buzzer and more of a showroom staple. It's traded its popularity at Best Buy (NYSE: BBY) for voraciousness at the Ford (NYSE: F) dealership, and maybe that was was inevitable. Two-thirds of the Sirius additions came from carmakers this past quarter, whereas it relied on retailers to move most of its new subscribers during the 2006 holiday season.

Sirius would need another talent signing on the level of Howard Stern to jump-start growth at the consumer electronics level, and its sobering fiscal restraint is unlikely to write checks that big for now.

That's OK. Sirius may have fallen short on its initial goal to turn cash-flow positive for all of 2007, but it was able to achieve that metric during the seasonally spiked second half of the year. When XM (Nasdaq: XMSR) reports later this week, it will likely confirm that Sirius is growing faster than its larger peer, though both firms are likely to have trimmed their overhead in anticipation of a corporate combination.

As for the merger, it's in regulators' hands now. It's been that way since the deal was announced more than a year ago. Sirius needs the deal to go through. It has burned through a ton of greenery in its brief history, now coming in with an accumulated deficit of $4.4 billion.

However, the dramatic margin improvement -- even if it's coming at the expense of growth -- should give Sirius investors hope in case the Department of Justice or FCC somehow nix the deal.

The future is going to be challenging. Whether it's in-dash hard-drive music storage in new car models, which eats away at the attractiveness of paying for commercial-free satrad music, or the availability of audio jacks in many cars that allow audio buffs to plug in their Apple (Nasdaq: AAPL), SanDisk (Nasdaq: SNDK), or Microsoft (Nasdaq: MSFT) players, Sirius is going to battle a ton of competitors -- with or without XM at its side.

Now that the company's financials are starting to improve substantially, at least we know that Sirius is not going to have to fight against itself.

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