Sirius XM Posts Decent Earnings, but Shareholders Are Not Enthused

The company updated its guidance for the 2015 year. The company expects revenue to be approximately $4.47 billion, as well as free cash flow of $1.25 billion and net subscriber additions of 1.4 million. The consensus estimates are $0.12 in EPS on $4.49 billion in revenue.

During the first quarter, the company repurchased 144 million shares for $534 million. With growing free cash flow, the placement of $1 billion of 5.375% senior notes in March and $1.25 billion of unused revolver capacity, Sirius has plenty of liquidity to continue returning capital to shareholders.

In just over two years since the company began its capital return program with a special dividend, it has paid its shareholders nearly $5.3 billion and retired nearly 22% of its then outstanding shares.

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Sirius reported an average revenue per user of $12.26 for the first quarter of 2015.

The company also added 431,000 net new subscribers in the first quarter, a 61% increase from the 267,000 net new subscribers in the same period of the previous year. Self-pay net subscriber additions were 394,000 in the first quarter, compared to 173,000 in the same quarter last year.

Jim Meyer, CEO of Sirius, said:

The year is off to a fantastic start at SiriusXM. We are increasing our subscriber guidance to approximately 1.4 million net additions and revenue guidance to approximately $4.47 billion after reporting our best first quarter for self-pay subscriber additions since 2008. Our results demonstrate that SiriusXM’s bundle of live news and sports, exclusive talk and comedy, and curated, commercial-free music is resonating with more and more consumers every day.

At the end of the first quarter, Sirius had about $482 million in cash and cash equivalents, compared to $147.7 million at the end of December 2014.

Shares of Sirius closed Monday down 0.4% at $3.95. After the report was released, shares were down 0.5% at $3.93 in premarket trading. The stock has a consensus analyst price target of $4.38 and a 52-week trading range of $3.00 to $4.04.

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