Sirius XM Radio on Thursday announced that its Sirius side posted a 25 percent jump in second-quarter revenue and pared back its net loss as it closed its final quarter as a standalone company.
Revenues for Sirius Satellite Radio, which closed its long-awaited merger with XM Satellite Radio after the quarter ended, rose to $283 million for the three-month period ending June 30, up from $226.4 million a year earlier.
"Despite a tough economy and weak auto sales, gross additions set a new second-quarter record. In the second quarter, both revenue and subscribers grew 25 percent, compared with last year," CEO Mel Karmazin said in a statement, adding that the company's costs, meanwhile, remained essentially flat and aided in reducing its net loss.
Sirius posted a net loss of nearly $84 million, compared with a loss of $134.1 million a year ago.
With the merger now complete, the combined company is expected to generate $400 million in cost savings next year and annualized revenues in excess of $2.4 billion.
"The combined company now has an annualized revenue run rate of over $2.4 billion, making Sirius XM Radio one of the fastest-growing and best positioned subscription media businesses," Karmazin said. "With rapid integration efforts under way, we started realizing synergies on day 1."
Sirius Satellite Radio and XM Satellite Radio announced on Tuesday that they closed their long-awaited merger, ending a 17-month saga since the deal was first announced to bring the nation's only two satellite radio companies together.
The combined company, with more than 18.5 million subscribers, is now called Sirius XM Radio. It is set to rank as the second-largest U.S. radio company, based on annual revenues.
Sirius XM Radio will offer more than 300 programming channels spanning exclusive shows, such as those of Howard Stern and Oprah Winfrey, and a la carte programming. Subscribers will be able to select certain programs from each of the two former companies under one package.
"By offering more compelling packages and the best content in audio entertainment, we are well-positioned for increased subscriber growth," Mel Karmazin, CEO of the newly minted Sirius XM Radio, said in a statement.
The new programs, expected to begin rolling out in early fall, will not require a new device. And as the companies previously stated, subscribers can continue to maintain their current service plan.
While the merger is designed to bring cost savings and synergies to the newly formed company, it was the consolidation of the nation's only two satellite radio companies that raised concerns with the Federal Communications Commission, which approved the deal in a 3-2 vote on Friday.
XM investors will receive 4.6 shares of Sirius for every XM share they currently own, and the ticker symbol will now trade under "SIRI." Sirius XM Radio will be headquartered in New York, and its wholly owned subsidiary XM Satellite Radio will remain in Washington, D.C.
XM Satellite Radio and Sirius Satellite Radio confirmed on Thursday that they are discussing a possible consent decree with the Federal Communications Commission in an effort to bring their 17-month merger effort to a conclusion.
The FCC, while inching closer to a resolution since this summer, has had concerns over compliance with commission rules. One concern regards radios with FM transmitters, and the other concern regards transmitters with terrestrial repeaters.
XM and Sirius noted that a possible consent decree with the FCC could include their agreement to:
One of five FCC commissioners has the swing vote on the XM-Sirius merger, according to a report in The Wall Street Journal.
- Adopt comprehensive compliance plans and take steps to address any potentially noncompliant radios remaining in the hands of consumers.
- In the case of XM, within 60 days of the order adopting the consent decree, shut down 50 variant terrestrial repeaters, and shut down or bring into compliance an additional 50 variant terrestrial repeaters.
- In the case of Sirius, bring into compliance or shut down up to 11 variant terrestrial repeaters within 60 days of the order adopting the consent decree. These terrestrial repeaters were shut off by Sirius in October 2006.
- Make voluntary contributions to the United States Treasury of approximately $17 million in the case of XM, and approximately $2 million in the case of Sirius.
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