Sirius Delivers Inline Results

Published on Thursday, 09 February 2012 13:53 Written by J Hawk

New York, February 9^th (TradersHuddle.com) – New York City based Sirius XM Radio (NASDAQ: SIRI) posted fiscal fourth quarter revenue of $784 million for the accounting period that concluded on December 31^st of 2011. This result was up 7 percent compared with the $736 million in revenues seen in the same quarter of last year and was largely in line with the consensus of market analysts.

The satellite radio company’s Q4 2011 earnings results demonstrated a favorable return to profitability, with diluted earnings per share rising from a loss of -$0.02 in Q4 2010 to a gain of $0.01 in the fourth quarter of 2011.  Furthermore, Sirius XM Radio’s net income increased over the same period from a loss of -$81 million in Q4 2010 to show a comfortable profit of $71 million in Q4 2011 on a GAAP basis.

The earnings announcement was released earlier today, and the stock market’s initial response was positive, sending Sirius XM Radio’s shares to a new medium term high of $2.20 that had not been seen since July of last year.  Nevertheless, profit taking subsequently set in, and as of this writing, the stock was trading in negative territory on the day, down -$0.03 or -1.37% to the $2.16 per share level in active trading of 57 million shares on the NASDAQ.

Analysts’ Consensus in Line With Sirius XM Radio’s Reported Earnings per Share

The earnings results that Sirius XM Radio released earlier today were more or less in line with market analysts’ consensus expectations for its Q4 2011 diluted earnings per share.

For example, a survey of eight market analysts by Zacks Investment Research showed a consensus of $0.01 for Sirius XM Radio’s Q4 2011 earnings per share, which was exactly what the company reported.

Nevertheless, the same number of analysts surveyed expected the company’s yearly earnings per share for 2011 to come in at $0.06, when the actual yearly result was slightly better at $0.07.

Sirius XM Radio Shows Impressive Subscriber Gains 

With respect to Sirius XM Radio’s performance in attracting new subscribers for its satellite radio service, the company reported that its net subscriber additions were 542,966 in 2011’s fourth quarter, which represented an impressive 65% gain versus the fourth quarter of 2010. 

Furthermore, the firm’s net self-pay subscriber additions came in at 374,432, showing a gain of 7% compared with Q4 2010.

The company also reported that its subscriber acquisition cost or SAC for each gross subscriber addition in the fourth quarter of 2011 fell to $55. This was 5% lower than its SAC of $58 in 2010’s fourth quarter.

The Technical Picture for Sirius XM Radio Remains Bullish

From a technical perspective, Sirius XM Radio (NASDAQ: SIRI)’s share price has shown a somewhat volatile long term upwards trend that has dominated trading since the first quarter of 2009.

After rising for most of the first half of 2011 to hit its all-time high point of $2.44 on May 31^st of 2011, the stock then almost halved in value, trading as low as the $1.27 level by October 4^th. Since that time, the stock has demonstrated an overall upwards trend.

Furthermore, the initial move higher on Sirius XM Radio’s favorable earnings report today has taken the stock to a new six month high at the $2.20 level, breaking resistance at the $2.19 level in the process.

Resistance is now observed at $2.35, $2.42, and at the stock’s all-time high of $2.44. Support shows up at $2.09, $2.00 and $1.86.