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Old 01-03-2007, 07:39 PM   #16
Join Date: Sep 08, 2006
Posts: 234
Whiskerbiscuit is on a distinguished road
Default Think Sat Standard stole my thesis ?

Originally Posted by Whiskerbiscuit
Yep, tomorrow's naysayers..... Satellite radio must be in trouble.... Sirius was down 21% of Q4 of 2005.... only 904,793 compared to 1,142,640.

Here's my thoughts... XM has some really lethargic numbers coming up. The Wall Street crowd pegged the quarter off about 35% nominally. If Sirius had 60% of the annual market and the industry was off 35% ( knowing what we know now that Sirius was off 20% ) suggests that XMSR may done < 600K net which would be disastrous for them....especially if they don't make CFBE which I suspect they will.

My numbers have XM at 570-595K for Q4-2006 based on these factors.

Tuesday, January 02, 2007
A Simple Look At Subscriber Numbers for XM
With Sirius announcing subscribers of about 905,000 today, the focus now shifts to XM Satellite Radio and where they will come in.

XM has guided to a range between 7.7 and 7.9 million for years end. The lower end of that guidance would represent a bit over 515,000 subscribers while the higher end would represent 715,000 subs.

Most will recognize that Sirius outpaced XM at retail during the quarter. NPD going into December showed Sirius with a 59% share on an NPD gross basis, which this year has typically equated to a net retail share greater than that which NPD shows for Sirius.

Using one companies numbers to try to determine the other companies numbers is not an exact science by any stretch of the imagination, but we should be able to obtain a reasonable range.

Last quarter on an overall basis Sirius had 61% of the net subscribers for the quarter. OEM numbers on a net basis were relatively similar, and there is no reason to think that that trend would continue in Q4. Retail is where the bulk of growth happens in Q4, and thus the question of what share of overall subs would be appropriate. One would reasonably conclude that the share for Sirius would be better in Q4 than it was in Q3. This would mean a number greater than 61% for Sirius. For reasons that equate to nothing more than an educated guess, we will look at 66% as the high end of the subscriber share range for Sirius.

Thus, with Sirius at 905,000 subscribers, XM would be:

At 585,000 with a share equal to last quarter (39.25%) – within guidance
At 554,000 with a share of 38% - within guidance
At 531,000 with a share of 37% - within guidance
At 509,000 with a share of 36% - misses guidance
At 487,000 with a share of 35% - misses guidance
At 466,000 with a share of 34% - misses guidance

It has been reported by analysts that XM has guided to the lower end of their range, and thus the outline used above could appear to be reasonable.

The best case scenario for the sector would be for XM to meet their guidance. Relative to quarterly market share this means that there is a band of 70,000 subscribers between matching last quarters market share and giving up a couple of points while still meeting guidance.

Now, another way to look at things relates to the gain on a percentage basis over last quarter. Sirius came in with a 105% improvement over Q3. If XM were to do the same, then their subscriber number would be about 584,000, which beats guidance. However, the retail share for XM did fall off a bit in the latest NPD numbers, so the question is what quarter over quarter gain would be appropriate. The low end of guidance would require an 81% improvement over last quarter. Splitting the difference between 81% and 105% would seem reasonable, and that would bring subscribers in at a 93% or a bit over 550,000.

At this point it is simply a waiting game. Until the announcement comes, analysts and investors alike will be crunching numbers in a similar fashion. Depending on sentiment, it could have an impact on PPS. If I had to guess, based purely on quarterly market share, I would figure somewhere between 487,000 and 554,000 subscribers for the quarter. A guess based on quarter over quarter gains would be around 550,000.

To be clear, subscriber estimates for Q4 are always difficult. With so many receivers being activated in the last week of the year, there is always a spill-over into Q1, and this can throw numbers off by quite a bit. That being said, I will throw my dart and state 540,000 for the quarter, which beats the most recent guidance.

This exercise is simply to try to put some sort of reasonable assessment on where XM will come in for subscribers. Reader input is welcomed. I purposefully did not get into churn and other factors so as to keep this subjective subject matter simple.
1/02/2007 10:52:00 PM
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