Investing

Sirius (SIRI): A Miss Is As Good As A Mile

Sirius_satellite_radio_1Sirius (SIRI) second quarter earnings demonstrated once again that, even after a merger with XM the new entity is not a viable business. The company’s gross subscriber additions were 1,029,287, barely above the 1,002,145 in the same quarter last year.

The rate at which revenue is increasing also moderated. For the quarter, sales hit $283 million, up from $226 million last year. Sirius had a net loss of $84 million compared to $134 million a year ago. Revenue per subscriber per month actually dropped modestly to $10.49, a sign that the company has very little pricing leverage.

Sirius still has total debt of nearly $1.3 billion and total liabilities of over $2.3 billion, a figure greater than its market cap.

The company depends on new cars sales for most of its new subscribers. With the automotive industry losing ground each month, it will be harder and harder to pick-up customers.

It is still not clear that Sirius can save a great deal of money in the merger. If subscriber growth remains modest and yield-per-customer keeps falling, it will not matter.

Douglas A. McIntyre

Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)

Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.

Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.

Click here now to get started.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.