Sirius Satellite Radio Inc., which has agreed to acquire its rival XM Satellite Radio Holdings Inc., reported a narrower loss for the fourth quarter Tuesday as revenues more than doubled.
Sirius had a net loss of $245.6 million, or 17 cents a share, in the last three months of 2006 versus a loss of $311.4 million, or 23 cents per share, in the same period a year earlier.
Revenues more than doubled to $193.4 million from $80 million a year earlier.
Analysts polled by Thomson Financial were expecting a loss of 19 cents per share on revenues of $173 million.
Sirius, which is based in New York, ended the year with just over 6 million subscribers, 82 percent higher than the 3.3 million it had a year earlier.
Sirius has agreed to buy its Washington, D.C.-based rival XM in a combination that would create one large provider of satellite radio services, but the deal, which the companies announced last week, will face tough regulatory scrutiny in Washington.
The companies describe the transaction as a merger of equals, but Sirius is paying a premium for XM’s stock, and the new company will be run by Sirius’ CEO Mel Karmazin while XM’s CEO Hugh Panero is departing.
Sirius also reported Tuesday that its average monthly “churn” rate, or the rate at which paying subscribers leave, rose to 2 percent in the fourth quarter from 1.5 percent in the same period a year ago. That figure is closely watched by investors because it could suggest higher costs for growing its subscriber base. Sirius said it expects average monthly subscriber churn between 2.2 percent and 2.4 percent in 2007.
In other figures also monitored by investors, Sirius said its cost for acquiring each subscriber fell to $103 from $113 in the same period a year ago. However, the total number of “gross” subscriber additions — before accounting for dropouts — fell 2.5 percent to 1.23 million in the fourth quarter.
Both Sirius and XM have posted major financial losses as they build up their subscriber bases and programming lineups.
Shares of both companies declined more than 40 percent last year amid concerns about slowing growth, particularly in retail sales. The companies are increasingly looking to add subscribers through radio units that come pre-installed in vehicles.
Sirius said it expects to have more than 8 million subscribers by the end of 2007 and revenues approaching $1 billion.
For the full year 2006, Sirius posted a net loss of $1.1 billion, or 79 cents per share, versus a loss of $863 million, or 65 cents per share, a year earlier. Full-year revenues rose to $637.2 million from $242.2 million in 2005.