SIRI - Sector: Services---Industry: Broadcasting & Cable TV

[setravis]

Sparking Major Trading Demand May 6th...

The stock continues to rise today, up 4.72%, to $2.22 per share.
Over 166 million shares have traded hands.
SIRI had a very well-received quarterly earnings report this week. Sirius XM Radio Inc. broadcasts various channels of audio from its satellites. The Company provides its services throughout the continental United States for a monthly subscription fee. Sirius delivers various streams of commercial-free music in every genre, as well as streams of news, sports, weather, talk, comedy, and public radio.

Day's Range: 2.15 - 2.23
52wk Range: 0.88 - 2.23
Volume: 166,468,911
Avg Vol (3m): 61,396,000
Market Cap: 8.73B
P/E (ttm): 222.00
EPS (ttm): 0.01
Div & Yield: N/A (N/A)

Technicals
Record Price High
Most Actives

Last Price Quote is:
10.20%above 13-day EMA
20.37%above 50-day EMA
RS Rating: 92 

[setravis]

SIRIUS XM Meets Zacks Estimates...

Zacks Equity Research, On Tuesday May 3, 2011, 8:45 am EDT

SIRIUS XM Radio Inc. (NasdaqGS: SIRI - News) declared its financial results for the first quarter of 2011 that barely met the Zacks Consensus Estimates. Quarterly GAAP net income was $78.1 million or 1 cent per share compared with a net income of $41.6 million or 1 cent per share in the prior-year quarter. First quarter EPS of 1 cent was exactly in line with the Zacks Consensus Estimate.

Quarterly total revenue of $723.8 million was an improvement of 9% year over year, and slightly below the Zacks Consensus Estimate of $726 million. The year-over-year revenue growth was primarily attributable to an increase in the subscriber base, higher sale of "Best of" programming, and rate increases to the company's multi-subscription and Internet packages.

Quarterly total operating expenses were $559.7 million compared with $538.6 million in the year-ago quarter. Operating income, in the first quarter of 2011, was $164.2 million compared with an operating income of $125.1 million in the year-ago quarter. Quarterly adjusted EBITDA was $181.4 million compared with $157.8 million in the prior-year quarter.

During the first quarter of 2011, SIRIUS XM generated $18.1 million of cash from operations compared with a cash consumption of $37.7 million in the prior-year quarter. Free cash flow (cash flow from operations less capital expenditures) in the reported quarter was a negative $16.8 million compared with a negative $127.2 million in the year-ago quarter.

At the end of the first quarter of 2011, SIRIUS XM had $433.7 million cash and cash equivalents and $2,766.8 million of outstanding debt compared with $586.7 million cash and cash equivalents and $2,891.7 million of outstanding debt at the end of fiscal 2010. At the end of the reported quarter, debt-to-capitalization ratio was 0.90 compared with 0.93 at the end of fiscal 2010.

Segment Wise Results

Quarterly Subscriber revenue was $622.4 million, up 7.4% year over year. Advertising revenue was around $16.6 million, up 14% year over year. Equipment revenue was $15.9 million, up 11.1% year over year. Other revenue was $69 million, up 24.4% year over year.

Subscriber Statistics

During the first quarter of 2011, SIRIUS XM added 373,064 net subscribers, which raised the company's total subscriber base to 20,564,028 at the end of March 31, 2011. Payment category wise, Self-Pay subscriber was 16,807,643 and Paid Promotional subscriber was 3,756,385.

Important Operating Metrics

In the first quarter of 2011, ARPU came in at $11.52 compared with $11.48 in the year-ago quarter. Average self-pay monthly churn rate was flat at 2% compared to the year-ago quarter. Subscriber acquisition cost was $57 compared with $59 in the prior-year quarter.

Customer services & billing expenses per subscriber were $1.08 compared with 99 cents in the year-ago quarter. Conversion rate was 44.7% compared with 45.2% in the prior-year quarter.

Future Financial Outlook

Management projected that full-year 2011 revenue of SIRIUS XM will be approximately $3 billion. Free cash flow in 2011 will approach $350 million. The company estimated that it will add 1.4 million net new subscribers in 2011. Adjusted EBITDA, in fiscal 2011, is likely to reach $715 million.

[setravis]

Noteworthy Insider Buys And Sells
In Consumer And Retail Sectors Wednesday To Friday

We present here two noteworthy buys and six noteworthy sells from Wednesday, Thursday and Friday's SEC Form 4 (insider trading) filings in the consumer and retail sectors, as part of our daily and weekly coverage of insider trades (the basic materials and energy sectors, and the technology sector, were covered in separate articles, hyperlinked above). These were selected by a review of over 790 separate transactions in over 450 different companies filed by insiders on Wednesday and Thursday, and an additional 200 or so filings so far today. The filings are noteworthy based on the dollar amount sold, the number of insiders buying or selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock (for more information on how to interpret insider trades, please refer to the end of this article):

Sirius XM Radio (SIRI): SIRI provides satellite radio services in the U.S. and Canada via approximately 135 channels of commercial-free music, sports, news, talk, traffic and weather on a subscription basis. On Thursday, two insiders filed SEC Forms 4 indicating that they sold 9.55 million shares for $20.1 million. Of these, EVP Patrick Donnelly exercised options to acquire 7.70 million shares and sold the resulting and an additional 1.54 million shares (total 9.24 million shares) for $19.45 million, ending with no direct holdings and 12,549 shares in indirect holdings after the sale (not including derivative holdings). Director James Holden exercised options and sold the resulting remaining 0.3 million shares, ending with 0.14 million shares after the sale (not including derivative holdings). These sales are in addition to the 6.94 million share sale that we reported earlier on last Friday, so that overall SIRI insiders have reported selling a total of 16.5 million shares in the past five trading days. In comparison, insiders reported selling only an additional 0.8 million shares in the past year.

SIRI reported an in-line Q4 earlier this month, on February 9th. Its shares, currently trading at the upper end of a long-term $1.50-$2.50 trading range, have been surprisingly strong after the report, consolidating in a tight 10% range of $2.00-$2.20. Technically, the shares look ready to break-out. However, with earnings staying generally in the 1c-2c range, it looks unlikely that shares will rise much beyond the long-term highs in the $2.40s on the strength of current fundamentals.

[setravis]

We expect Satellite radio company, SIRIUS XM Radio Inc. (SIRI), to beat expectations when it reports second-quarter 2013 results on Jul 25, 2013 before the market opens.

Why a Likely Positive Surprise?

Our proven model shows that SIRIUS XM is likely to beat earnings because it has the right combination of two key ingredients:

Positive Zacks ESP: Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +50.00%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

Zacks #3 Rank (Hold): SIRIUS XM currently has a Zacks Rank #3. Note that stocks with Zacks Ranks of #1 (Strong Buy), #2 (Buy) or #3 (Hold) have a significantly higher chance of beating earnings.

The combination of SIRIUS XM's Zacks Rank # 3 (Hold) and +50.00% ESP makes us very confident of a positive earnings beat on Jul 25, 2013.

What is Driving the Better-Than-Expected Earnings?

SIRIUS XM in its interim report has reported a net addition of 715,000 customers for the second quarter of 2013, registering a 15% annualized and a staggering 58% sequential growth. With the latest subscriber gain, SIRIUS XM has crossed the 25 million customer mark and has added 1.17 million subscribers in the first half of fiscal 2013.

Increased automobile sales and the continuous launch of innovative products have mainly contributed to such strong subscriber growth. This, in turn, is expected to boost SIRIUS XM's top line.

Additionally, SIRIUS XM boasts a solid product portfolio and strong business relationships with the original equipment manufacturers. These have led the company to raise its 2013 fiscal outlook by 100,000 to 1.5 million.

Other Stocks to Consider

Other companies you may want to consider on the basis of our model which shows that they have the right combination of elements to post an earnings beat this quarter are as follows:

Cablevision Systems Corporation (CVC) currently has an Earnings ESP of +120.00% and holds a Zacks Rank #3 (Hold).

Leap Wireless International Inc. (LEAP) has Earnings ESP of +3.00% and carries a Zacks Rank #3 (Hold).

[setravis]

Sirius is Looking to the Internet to Go International

Sirius XM Radio (NASDAQ:SIRI) has been criticized for its lack of international expansion as the company and its service are, for the most part, focused in the U.S. and Canada. Chief Executive Officer Jim Meyer said at the Goldman Sachs Communacopia conference on Thursday that the company's international expansion efforts will focus more on Internet-based products than satellite, and the company will likely look to Mexico first for that growth, according to a report from Reuters.

Both the company's board of directors and John Malone, chairman of Liberty Global (NASDAQ:LBTYA), which owns a controlling stake in Sirius, have complained about the company's lack of international expansion. Meyer, who has lead the company for less than a year, is pushing Sirius outside just satellite radio towards investing more in connected car systems.

"One of the reasons why it's key that we participate in that rollout and building of that architecture is that it's going to give us opportunities to look at services on an international basis that are different than we've done here in the U.S.," Meyer said.


Meyer also said that international efforts will likely focus on streaming and Internet-based services rather than satellite radio, and that it's unlikely the company would launch satellites in other countries. Although Meyer said Mexico would probably be the first target of that expansion, he said there wasn't anything to announce quite yet.

Meyer was the brains behind Sirius's first big acquisition earlier this year. The company announced that it is buying Agero Inc. for $530 million back in August. Agero is a connected vehicle system and provider of telematics for cars. Through the acquisition, Sirius will provide telematics services to more vehicles than any other company. Agero counts automakers Acura, BMW (BMW.PK), Honda (NYSE:HMC), Hyundai (HYU.PK), Infiniti, Lexus, Nissan (NSANY.PK), and Toyota (NYSE:TM) as customers. That deal is expected to close in the fourth quarter, according to Reuters.

Connected car systems that allow drivers to connect a computer in their car to the Internet and allow it to interact with their smartphone devices is seen as the future of automobile technology. Since Sirius is already used in many vehicles, scooping up a telematics company was a smart move that will diversify the company outside just satellite radio and move its business outside just the U.S.

[setravis]

Sirius XM Breaks $4.00 this week..Buy Backs Break down the wall.. Calling it now.
Sentiment: Strong Buy

Day's Range: 3.92 - 3.97
52wk Range: 2.55 - 3.99
Volume: 26,720,638
Avg Vol (3m): 38,052,000
Market Cap: 24.53B
P/E (ttm): 52.67
EPS (ttm): 0.08