And the Sirius XM Fans Keep On Coming

The first quarter was another magnetic period for Sirius XM Radio (Nasdaq: SIRI).

The satellite-radio operator added 171,441 net subscribers during the first three months of the year. That marks the third consecutive quarter of sequential subscriber growth at Sirius XM, after it had kicked off 2009 with back-to-back declines.

With more than 18.9 million subscribers, Sirius XM is just shy of its all-time high established five quarters ago. The recession took a bite out of the media giant's sails, but several quarters of healthy auto sales have done wonders for the premium offering.

Ford (NYSE: F) car sales have been strong for several months now, and even the beleaguered Toyota (NYSE: TM) has bounced back. These trends bode well for Sirius XM's future, and the company's earlier guidance for 500,000 net new subscribers in 2010 appears to be conservative.

There's more to the good news than strong auto sales, though. Those who are buying cars with factory-installed receivers are sticking around. Self-pay churn and conversion rates are better now than they were a year ago.

Sirius XM won't be reporting its quarterly results until next month. It's simply delivering a bit of the good news early, just as it did three months ago.

Putting out the encouraging numbers early is a good move. It meets with Nasdaq OMX Group (Nasdaq: NDAQ) later this month to appeal its pending exchange delisting. With the upbeat numbers propelling Sirius XM's stock over the $1 mark, if it's able to close with a bid of $1 or higher over the next 10 trading days, it can just send a cardboard cutout of CEO Mel Karmazin to the April 29 meeting, because it will already be in compliance.

Sirius XM has tacked on more than 530,000 net subscribers over the past nine months. Karmazin has cut costs at the merged company, enhancing the bottom-line power of every incremental listener.

Are there threats to the model? Sure. Many of the most popular programs through Apple's App Store are free music-streaming services. Sierra Wireless' (Nasdaq: SWIR) Overdrive mobile hot spot can spit out streams at 4G speeds on the road. However, the same improving discretionary income that will drive sales of smartphones and mobile broadband connections will also justify the reasonably priced Sirius and XM subscriptions.

It's a good time to be Sirius XM Radio.

Will today's news be enough to keep Sirius XM above the $1 mark this time? Share your thoughts in the comments box below.