MediaFile

Better days ahead for Sirius XM?

August 6, 2009

Sirius XM Radio has reason to be excited about the success of the cash for clunkers program. The satellite radio operator, which posted quarterly results this morning, raised its income outlook for the year on a potential rebound in car sales.

Chief Executive Mel Karmazin said on the earnings call that he was cautiously optimistic that auto industry sales will pick up in the second half of this year.

After all, any increase in car sales translates into more subscribers for Sirius XM, which gets most of its new users from satellite radios built into cars.

Investors have been optimistic about Sirius’s stock all this week, given the launch of its iPhone software and the government’s Car Allowance Rebate System, which lets people trade in their old vehicles for rebates on new, fuel-efficient cars. Reuters’ Franklin Paul wrote on Tuesday:

The U.S. government’s popular “cash for clunkers” incentive program has added spark to the idea that auto sales may rebound after a four-year decline. By allowing people to trade in old vehicles, the program has lifted industry-wide sales back above 11 million units on an annualized basis.

What’s more, Barrington Research analyst James Goss told Paul that Sirius converts about half of its users who get trial accounts when they buy a car into paying customers.

Now, only time will tell whether the optimism lasts, both in the beleaguered U.S. car industry and among Sirius shareholders.

Keep an eye on:

  • How Netflix gets your movies to your mailbox so fast. (Chicago Tribune)
  • Falling terminal sales have prompted Bloomberg to make one-off payments to staff. (Financial Times)
  • Thomson Reuters posts a better-than-expected quarterly profit. (Reuters)

Photo: Sirius XM CEO Mel Karmazin/Reuters

Comments
4 comments so far | RSS Comments RSS

There is a DVD movie out about the whole Sirius XM/Mel K. story called: Stock Shock.Very good flick and explains stock market manipulation as well. Stock Shock is at amazon.com and stockshockmovie.com

 

I have been a sirius subscriber since Howard Stern made the move to sattelite radio. If they don’t renew Howard’s contract in 1.5 years, I am gone. I was VERY DISAPPOINTED in Sirius’s lame attempt at an iPhone application. The fact that they left out Howard is asinine. They did the exact same thing 4 years ago when they first launched internet Sirius. It took some wrangling to get Howard on there. It makes absolutely no sense to have an app for a service you already pay for and to leave off the most important part of that service. Without Howard Sirius would not exist anymore and I will be listening to Pandora and Slacker instead.

Posted by Dan | Report as abusive
 
 

I can’t believe this company is doing very much “right”. I am a perfect example of future churn and lost customer forever. I had a Sirius S50 which failed several times. Sirius sent me a refurb Sportster 4 (with no disclosure or agreement) and included a boom box in the package. I was so impressed I decided to keep the s50 active and paid to have BOTH UNITS. The Sportster also was not dependable, intermittently cutting out for the first 10 or 11 months, and that unit finally quit altogether (I purchased an extra antenna which didn’t help). The S50 had given up the ghost a couple weeks earlier, so I called Sirius. They were not helpful, and I asked if I could just cancel and was told I could, WITHOUT OWING ANY ADDITIONAL MONEY. They deactivated my account, and then BILLED MY CREDIT CARD $66.53; they were obliviously unconcerned when I called them about the failure to disclose this impending charge.Now I’ve bought my wife a new car which has XM installed; MANY soliciting mail and phone calls started right away, but nobody would even listen to my concern that Sirius/XM might not be a company I wanted to do business with because no human being would call me back about that charge. All the high prssure sales persons would do was to repeatedly read from a company “pitch line”, totally ignoring that I wasn’t a happy former customer. I now have one deactivated XM radio in a new car, and two broken Sirius radios in the closed for which I will never trust the service provider enough to do business with.

Posted by Paul Wills | Report as abusive
 

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