Sirius Earnings Meet Expectations as Subscriber Growth Continues

Sirius XM Radio (SIRI) on Wednesday posted a small profit in its second quarter, but reported better than expected revenue thanks to a jump in subscribers due to a healthier auto industry, as well as improvements in its operations.

The company's net income was $15.3 million, or less than 1 cent per share, compared with a loss of $159.6 million, or 4 cents a share, one year ago. This was in line with analyst estimates. Revenue at the company, which is home to popular radio host Howard Stern, rose 16% to $699.7 million, beating analysts' average estimate of $691.4 million.

Another measure showing the improvement at the company is its adjusted EBITDA, which the company said was $154.3 million in second quarter 2010, up 17% from its second-quarter 2009 adjusted EBITDA of $132.2 million. Free cash flow was $108.3 million, compared to $12.7 million in the same period last year.

Sirius added more than 583,000 net subscribers in the second quarter, and ended the quarter with over 19.5 million subscribers -- up 6% from last year and a record high. Average revenue per subscriber was up 11% to $11.81. Gross subscriber additions rose 46%, while deactivations declined 8%.

"The sharp subscriber growth and double-digit increase in adjusted revenue and adjusted EBITDA show that we continued to execute on our business plan during the second quarter," said CEO Mel Karmazin. "Our business has improved substantially in the past year, and we look forward to a strong second half and 2011."

The company raised its full-year revenue estimate to $2.8 billion from $2.7 billion as it continues to predict adjusted EBITDA of approximately $575 million for 2010. The company says it expects net subscriber additions to approximately 1.1 million for the full year.

On Wednesday, Sirius shares jumped 4.5% in premarket trading.