Tomahawk, WI 11/12/2013 (BasicsMedia) – Sirius XM Radio Inc. (NASDAQ:SIRI) is raiding the radio services industry mercilessly. The company’s high growth trajectory not only leaves a lot to be desired, but also reveals just how much ground its competitors have to cover to catch up with it. Take Pandora for example, Pandora is still leading the internet radio service with over 72 million active listeners. The company generates roughly $8 per listener per year. In comparison, Sirius which operates satellite radio service generates $130 per listener per year.

In radio service business, be it satellite or internet based, big listener base is the real dollar. This is why, Pandora is having huge headache following Apple’s iTunes Radio launch which according to the latest report by Apple, already has more than 20 million unique listeners and 1 billion sons have been streamed. Basically, Apple’s gain is Pandora’s loss and while Pandora remains ahead of the competition in the internet base, it’s only a question of how long it can hold on to the podium position. However, for Sirius, there isn’t any serious threat and the company is having a field day raking in profits and devising more strategies to improve its position in the radio service industry.

First, the company has just made capital investment in form of satellite network installation that is now expected to free its cash flow until the next four or five years. This means that Sirius how has its free hands to test a few things here and there to up its profits. Another step in the right direction is the company’s $2.6 billion takeover of Agero’s Connected Vehicle Unit. This is a promising revenue source as vehicle connection has now becoming the new radio service revenue frontier that is chased by every player. But even in this segment, Sirius appears to be ahead of the competition. The company is moving beyond the traditional new vehicle connection into used car connection. The used car connection is expected to be even bigger in revenue than new car connection in the coming years. So it can only be said that Sirius has got it right early enough. Vehicle connection in general is a lucrative business, and satellite radio service is leading total vehicle connection at 70%; and this where the juice is for Sirius.

In the most recent quarterly data, Sirius generated $962 million in revenue, indicating 11% increase on year over year revenue. In the same quarter, net income was $63 million, revealing a decrease of 16%. Although net income decreased, it happened because the company was able to extinguish its debt, thus bringing it to even closer financial strength in the coming quarters. Tax expenses also ate into the quarter’s net income.

The company incurred increased tax of $124 million in the quarter which was 128% increase from the same quarter last year. Also, the company reduced its outstanding debt to 5.5% from the 9.2%.

Sirius is now looking for a better next quarter having successfully retired some of its senior notes in the previous quarter. The company’s new addition of 513K fresh subscribers is also expected to tip up its next quarter earnings and probably profit. Its total subscriber base as at the most recent quarter now stands at 25.6 million.

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