OEM Drives XM, Sirius Sub Gains
XM Satellite Radio reported a big first quarter boost for its automotive-related business, but a customer net loss within its retail efforts.
For the first quarter, XM reported a net gain of 303,000 customers. The company had a 51,000 net loss in retail net subscriber additions, but generated 355,000 OEM (original equipment manufacturer - or carmakers) net subscriber additions during the period.
That OEM channel for XM grew its gross customer additions by 49 percent year-over-year, with those gross numbers for the three-month period jumping by 802,000.
At Sirius, the satellite radio company said retail subscribers increased 10 percent in the first quarter to 4.643 million, up from 4.234 million at the end of first quarter 2007. OEM subscribers increased 72 percent in the first quarter to 3.986 million, an increase from 2.323 million reported at the end of first quarter 2007.
Sirius said it added 322,534 net subscribers in the first quarter, for a total of 8.644 million. While those were solid customer gains for the company, Sirius said churn jumped to 2.7 percent in the period, up from 2.3 percent for the same quarter last year.
During a conference call with analysts, Sirius executives said the company's partners in the aftermarket business have reported some resistance among consumers looking to buy satellite radio service due to issues tied to the pending merger.
Sirius also reported a 33 percent increase in first quarter revenue, to $270.4 million. The net loss for the three-month period was $104.1 million, an improvement over the first quarter 2007 net loss of $144.7 million.
XM's first quarter net loss was $129 million, compared to a first quarter 2007 net loss of $122 million. Executives attributed the increased net loss to merger and legal expenses and bigger recording industry payments. Revenue for the first quarter increased to $308 million, a nearly 17 percent increase when compared to first quarter 2007 revenue of $264 million.