SIRIUS XM Keeps Beating & Raising Targets (SIRI)

SIRIUS XM Radio Inc. (NASDAQ: SIRI) managed to post a raw and real profit this morning.  The satellite radio monopoly reported that third-quarter earnings were $67.6 million, which rounds up to $0.01 EPS.  Its loss a year ago was $151.5 million, or -$0.04 EPS.  Revenue rose to $717.5 million from $618.7 million (see below for adjusted or non-GAAP figures).  Thomson Reuters had estimates at $0.00 EPS and $718.71 million in revenues.

Net subscriber adds came to 334,727 in the quarter, giving a full subscriber count of 19.86 million subscribers.  With its new SIRIUS plug-in and with Christmas coming, it seems that the 20 million hurdle is assured for SIRIUS XM.  SIRIUS XM said this morning, as it did previously, that it expects to end the year with approximately 20.1 million subscribers.

What is interesting here is that the 1 penny EPS figure may actually have some pointing out that SIRIUS XM did this on revenues which were a tad under plan from research analysts.  What is at issue here on a ‘beat or miss on revenue’ is that ‘adjusted revenue’ was listed as $722.5 million for the quarter, up 15% from a year ago.  FactSet Research had a consensus for break-even earnings on revenues of $719.1 million.

Guidance is being raised, again.  SIRIUS now sees full-year adjusted EBITDA of roughly $600 million, above the prior target of $575 million.  The company also now sees 2010 revenues exceeding $2.8 billion and it expects that free cash flow will exceed $150 million.

The company has managed to lower its debt costs in a recent refinancing and it has managed to keep expectations robust but not so robust that the targets cannot be exceeded each time.  Our take with it being Q4 and with the new plug-in is that SIRIUS XM will probably end the year with closer to 20.2 million subscribers rather than the 20.1 million in predicted.Shares of Sirius closed Wednesday at $1.57, and shares are trading above the 52-week high of $1.59 at $1.61 to $1.62 in the early pre-market indications.

JON C. OGG