By Amy Gilroy
The global market for car infotainment systems will see a 3 percent increase this year and growth will be even stronger over the next four years, said IHS iSuppli. More cars are in production and they are featuring more electronics over previous years, said the analyst firm. Read More
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By Amy Gilroy
U.S. drivers continue to hold onto cars for increasingly longer periods. A new Polk study finds consumers keep their cars almost 6 years, up by 4.7 months from about a year ago. Read More
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By Demian Russian
During Sirius XM Radio’s (NASDAQ:SIRI) Q4 conference call CEO Mel Karmazin stated, “The consensus for auto sales in 2012 is approximately $13.7 million…the fact that U.S. light vehicle sales should be up by 8% provides a solid foundation for subscriber growth this year.” Sirius XM management offered 2012 guidance for 1.3 million net new subscriber additions, which comes in below 2011′s 1.7 million and even 2010′s 1.4 million net new sub adds. While Karmazin even noted that he was “very optimistic about our ability to grow subscribers” and that he expects a “bigger contribution from the reactivation of radios in used cars” in 2012, he explained that the comapany’s subscriber guidance was “tempered by our sense of conservatism around the price increase we implemented January 1st, 2012.” Karmazin added, “We will update our guidance, if appropriate, as the year progresses.”
The year seems to be progressing well for auto sales according to TrueCar’s official February 2012 auto sales and incentives forecast, released today. TrueCar expects new car sales in February to be the highest in nearly four years. TrueCar is forecasting that new light vehicle sales in the U.S. (including fleet) during the month of February will total 1,088,321 units, up 19.2% month-over-month and 9.6% year-over-year. This translates into a SAAR (Seasonally Adjusted Annualized Rate) of 14.3 million, up from 13.3 million in February 2011 and up from 14.2 million in January 2012. TrueCar also upgraded its 2012 total sales forecast from 13.8 to 14.0 million. Read More
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By Demian Russian
Wunderlich Securities Media Analyst Matthew Harrigan will be the special guest on tonight’s (Wednesday, February 22nd @ 8:00PM ET) Playground Radio program for an exclusive interview.
Following Sirius XM Radio’s (NASDAQ:SIRI) Q4 earnings release and conference call, Harrigan issued a new report reiterating his previous HOLD rating and $2.00 price target on the equity. Harrigan previously raised his price target from $1.65 to $2.00 on May 13th, 2011, and has maintained a HOLD rating and $2.00 price target since that time. While outlining many positives for the company in his most recent report, Harrigan maintains some concerns regarding valuation. Read More
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By Demian Russian
James C. Goss
In a research note issued on the heels of Sirius XM Radio’s (NASDAQ:SIRI) Q4 earnings results, Barrington Research Associates Senior Investment Analyst covering the Media and Entertainment Industry, James C. Goss, reiterates his OUTPERFORM rating and $3.00 price target on the equity.
“Sirius XM Radio continues its progress in the key metrics that matter, including subscriber growth, conversion of trial subscribers to self pay, revenue generation, moderating SAC levels, EBITDA and Free Cash Flow improvement and improving financial leverage ratios. In addition, a first-ever price increase should raise ARPU over a span of a couple of years and the launch of Satellite Radio 2.0 is intended to jump start some new IP-driven services that should extend the appeal of the service to some additional potential customers while also potentially improving the value proposition for many existing customers.”
– James C. Goss, Barrington Research Associates Senior Investment Analyst
Goss refers to Sirius XM Radio’s reported fourth quarter net subscriber gain of 542,966 as being “nominally better-than-expected.” His estimate had been for 535,926. Sirius XM’s full-year 2011 net subscriber growth of 1,701,860 brought its total subscriber base to 21,892,824, which slightly beat Goss’ estimate for 21,885,784. Fourth quarter revenues of $785.7 million, up 6.5% year-over-year, came in slightly below his $793.1 million estimate. Full-year 2011 revenues amounted to $3,025 million, slightly below his $3,031 million estimate. While Sirius XM reported a 17% increase in full year 2011 EBITDA to $731 million, exceeding managements guidance for $715 million, full-year EBITDA came in a bit below Goss’ more aggressive $752 million estimate. Goss notes that Sirius XM management raised full-year 2012 EBITDA guidance to $875 million (indicating 20% growth), which exceeds his existing $867 million estimate. Read More
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By Demian Russian
Following Sirius XM Radio’s (NASDAQ:SIRI) Q4 earnings release Wunderlich Securities Media Analyst Matthew Harrigan maintains his previous HOLD rating and $2.00 price target on the equity. While noting that his model conforms to management’s 2012 guidance for 1.3 million net subscriber additions, he feels that management is likely approaching the newly instituted base price increase from $12.95 to $14.49 with caution and that there is also upside possible from Sirius XM’s recent initiatives in the used auto market.
Management is likely being admirably conservative in its 1.3mm net subscriber guidance as it assesses any fallout from the near 12% price hike to $14.49. For this reason, we particularly emphasize our sensitivity matrices for 2016 sub base, EBITDA, and free cash flow potential. It is possible that upside from pre-owned vehicle and franchise dealership programs for complimentary three-month trials on pre-installed radios could offset much of the fallout from self-pay churn increasing to an estimated 2.1%.
– Matthew Harrigan, Wunderlich Securities
Harrigan notes that management’s 2012 net subscriber guidance for 1.3 million is “comprehensible” when viewing it in the context of 2.1% self-pay churn, along with conversion rates remaining in the 44%-46% vicinity. He also point out that the 2011 67% penetration rate could be “slightly dampened” as a result of increasing Asian OEM market share. Read More
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By Demian Russian
On the eve before Sirius XM Radio’s (NASDAQ:SIRI) Q4 earnings release and conference call, Barrington Research Associates Senior Investment Analyst covering the Media and Entertainment Industry, James C. Goss, will be discussing his thoughts on the Satellite Radio service provider during an exclusive, live interview with Playground Radio tonight, Wednesday, February 8th, at 8:00PM Eastern.
On the heels of Sirius XM Radio’s (NASDAQ:SIRI) pre-announcement of Q4 2011 net subscriber additions, Goss, reiterated his OUTPERFORM rating on the company’s stock and upgraded his price target from $2.40 to $3.00. Goss saw recovering auto sales continuing to fuel the company’s OEM-driven subscriber growth metrics. Goss also noted additional growth from expanding initiatives in the used auto market, particularly from Certified Pre‐Owned auto sales programs. Goss’ 2012-based $3.00 price target is based on a ~25X multiple of his 2012 EV/EBITDA estimates. Read More
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By Demian Russian
With SIrius XM Radio (NASDAQ:SIRI) CEO Mel Karmazin pre-announcing that the company has beat their 2011 year-end net subscriber guidance, adding ~550,000 net new subscribers in the fourth quarter and ~1,700,000 net new subscribers in 2011, investors are now focused on how 2012 is shaping up so far. While Sirius XM is making great new strides in penetrating the used auto market with free promotional trial programs, North American new vehicle sales remains the largest driver fueling Sirius XM’s subscriber growth trajectory.
Premier auto industry tracker TrueCar released their official January 2012 auto sales forecast today and is seeing continuing strength in the U.S. auto sector, noting that January retail sales will be up for the sixth straight month of year-over-year growth.
The underlying consumer demand for new vehicles continues to improve at a steady pace. For the first time in several years, we are starting the year off with a warm and fuzzy feeling of the good-old-days where the industry and the consumers are once again focused on the excitement of the new cars –and not which car company is going to survive. The positive momentum from the end of 2011 and a reasonable January 2012 sales rate will likely take industry sales very close to 14 million units this year.
– Jesse Toprak, Vice President, Market Intelligence, TrueCar.com
According to TrueCar’s January 2012 official forecast, new light vehicle sales in the U.S. for the month of January will total 874, 481 units, up 6.7% year-over-year and down 29.6% month-over-month, which translates into a SAAR (Seasonally Adjusted Annualized Rate) of 13.6 million, up from 12.7 million in January 2011 and flat month-over-month. Read More
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By Mick Weinstein
Horace Dediu at Asymco released this terrific graph showing “a brief history of personal computing platforms. “What’s unique here is the seamless move to mobile devices – Dediu’s graphic combines Apple (NASDAQ:AAPL) iPhones, iPads and Google (NASDAQ:GOOG) Android devices with the older PC data from the time those mobile platforms emerged a few years ago. That’s a helpful move, as those platforms have clearly become an important part of personal computing in the fullest sense.
Here’s a second view of the data, by units shipped per year. Note that while PC growth is flattening, it remains at this point the leading platform – but it appears merely a matter of time until Android overtakes PCs: Read More
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By Demian Russian
James C. Goss
On the heels of Sirius XM Radio (NASDAQ:SIRI) CEO Mel Karmazin’s pre-announcement of Q4 2011 net subscriber additions, Barrington Research Associates Senior Investment Analyst covering the Media and Entertainment Industry, James C. Goss, reiterates his OUTPERFORM rating and upgrades his price target from $2.40 to $3.00.
Goss sees the recovering auto industry continuing to bring positive momentum to Sirius XM’s OEM-driven subscriber growth metrics. He expects gains to continue from not only the new auto channel, but also sees additional growth being derived from the company’s expanding initiatives in the used auto market as well, particularly from Certified Pre‐Owned auto sales programs related to high-end cars which target “a customer base possessing financial means and premium tastes.” Goss noted the benefits of lower SAC charges and room for growth in the used auto market. “We feel the effective rollout phase has many years to run, with the current share of autos having factory installed Satellite Radios now only 15% of the U.S. fleet,” Goss explained. Read More
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By Demian Russian
With Sirius XM Radio’s (NASDAQ:SIRI) subscription radio business tied so closely to North American auto sales and Satellite Radio activations at the OEM level, and with the company needing to bring in 442,000 net new subscribers during the fourth quarter to meet its 2011 full-year subscriber guidance for 1.6 million net additions, investors are closely monitoring the U.S auto industry for continuing signs of strength heading into the close of the year.
TrueCar released their official December 2011 sales and inventives forecast today and is expecting total new light vehicle sales in the U.S. (including fleet) for the month of December will be 1,236,911 units, representing an 8.1% year-over-year and a 24.4% month-over-month improvement. This translates into a SAAR (Seasonally Adjusted Annualized Rate) of 13.5 million, down from a November SAAR of 13.7 million but up year-over-year from a December 2010 SAAR of 12.5 million.
December’s sales rate was a continuation of the rather slow and steady recovery that now symbolizes 2011. This year was absent of a blockbuster sales month but we see this pace of growth as healthy and sustainable in the coming year where the industry is going to sell nearly 14 million units based on the merits of its products and improved economy.
– Jesse Toprak, Vice President of Industry Trends and Insights for TrueCar.com
While fleet and rental sales are expected to make up 19% of the month’s total sales, TrueCar expects retail sales to be up 8.7% year-over-year and 26% month-over-month. Higher retail sales are traditionally more beneficial to Sirius XM, carrying higher penetration and conversion rates. Read More
By Amy Gilroy
Best Buy (NYSE:BBY) blundered late in the holiday season, notifying some customers that orders they placed weeks prior would not ship.
The big box giant acknowledged that orders for popular items placed over Black Friday and Cyber Monday exceeded supplies, leaving it in unable to meet demand. Best Buy offered free shipping this year, aggressively competing against Amazon.com (NASDAQ:AMZN), but was apparently unprepared for the surge in sales.
A Best Buy spokeswoman told several news outlets that overwhelming demand of hot products led the company to cancel orders. Read More
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