updated 1/26/2005 2:17:23 PM ET 2005-01-26T19:17:23

Sirius Satellite Radio Inc. Chief Executive Mel Karmazin has not met with top executives of rival XM Satellite Radio Holdings to discuss a merger between the two broadcasters, Karmazin said on a conference call Wednesday after Sirius reported a wider fourth-quarter loss.

“I have not met with the chairman or CEO, so I have no idea where any of this came from,” Karmazin said in response to a New York Post story that claimed Sirius and XM have started early merger discussions.

Marquis Investment Research analyst Greg Gorbatenko said in a research note that he believes the merger is unlikely to happen because “we doubt it would pass regulatory muster.”

Karmazin, a former Viacom Inc. executive who has been at Sirius for about two months, also tried to tone down speculation that the company has been in talks with Viacom about buying out the remainder of shock-jock Howard Stern’s contract so he can start at Sirius before January 2006.

“Because I worked at Viacom, I do have lots of conversations with them all the time,” Karmazin said. But, “our plan right now is that Howard will start with us in January 2006.” He did add that if there is an opportunity to sign Stern earlier, Sirius would like to do so.

Karmazin also noted that Sirius, which first made a name for itself by offering commercial-free music channels, is preparing to add commercials to its talk and sports channels and emphasized that advertising will become an important revenue stream in the coming year. The company is currently in the process of increasing its ad sales staff and Karmazin said he expects “a good number” of Stern’s advertisers will follow him to Sirius.

Earlier Wednesday, Sirius said its loss widened in the fourth quarter, due to expensive sports programming and the cost of serving new subscribers.

The New York-based company also raised its forecast for subscriber additions, citing last year’s rapid growth and a deal to have its radios as a factory option in up to 21 Ford models.

For the fourth quarter, Sirius lost $261.9 million, or 21 cents a share. That compares with the previous year’s loss of $147.8 million, or 14 cents a share.

Analysts surveyed by Thomson First Call had forecast, on average, a loss of 16 cents a share.

Shares of Sirius fell 37 cents, or 5.9 percent, to $5.87 in early trading on the Nasdaq Stock Market.

Programming and content expenses jumped to $26 million from $8.5 million, mainly due to additional sports programming. Last year, Sirius began broadcasting NFL games under a seven-year, $220 million deal.

Customer-service and billing costs rose to $8.6 million from $2.9 million, caused by the company’s increased subscriber base.

Sales and marketing expenses rose to $50.7 million from $35 million.

Revenue rose fivefold to $25.2 million from $4.95 million, driven by a net increase in subscribers of 480,969 to a total of 1.24 million at the end of the year.

For 2005, Sirius expects to record an operating loss of about $480 million on revenue of about $210 million. First Call’s projections are a loss of 47 cents a share on revenue of $214 million.

Sirius expects to add a net 1.4 million subscribers in 2005. That would put the company’s customer rolls above 2.5 million by the end of the year. Previously, Sirius had estimated there would be about 2.3 million subscribers at the end of 2005.

Sirius expects each new subscriber to cost $145, down from $177 last year and $293 in 2003. It had expected to pay $200 to acquire each new customer in 2004.

For 2004, Sirius’ loss grew to $712.2 million, or 57 cents a share, from the previous year’s $314.4 million, or 38 cents a share. Revenue jumped to $66.9 million from $12.9 million.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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