Satellite Radio Playground

By Demian Russian

Sirius XM Radio (NASDAQ:SIRI) CEO Mel Karmazin stated during the company’s last quarterly conference call that the consensus for 2012 total U.S light vehicle sales was $13.7 million and that the expected year-over-year growth of 8% provided a “solid foundation for subscriber growth this year.” While offering up full-year 2012 net new subscriber guidance of only 1.3 million, which comes in below the 1.7 million net new subscribers the company was able to generate last year and even below the 1.4 million the company was able to garner in 2010, Karmazin even added that he was “very optimistic about our ability to grow subscribers” and that he expected a “bigger contribution from the reactivation of radios in used cars” this year. With so much optimism, why guide for only 1.3 million net subscriber adds? Karmazin explained that management’s 2012 full-year subscriber guidance was “tempered by our sense of conservatism around the price increase we implemented January 1st, 2012.” That being said, Karmazin did add, “We will update our guidance, if appropriate, as the year progresses.”

In light of a strengthening auto sales channel, it may become more “appropriate” to raise subscriber guidance. Read More