Sirius XM Radio Highlight

Sirius XM CEO Mel Karmazin on a conference call highlighted that the user figures make the company one of the largest subscription businesses in the world. He also said that the company would increase its subscriber addition target of 1.4 million for this year if it wasn't for uncertainty following the earthquake and tsunami in Japan, which he said could lead to short-term supply issues for automakers. Karmazin said through April his team hasn't seen any signs of shortfalls.

At the end of the first quarter of 2011, SIRIUS XM had $433.7 million cash and cash equivalents and $2,766.8 million of outstanding debt compared with $586.7 million cash and cash equivalents and $2,891.7 million of outstanding debt at the end of fiscal 2010. At the end of the reported quarter, debt-to-capitalization ratio was 0.90 compared with 0.93 at the end of fiscal 2010.

Karmazin said Sirius XM is expecting to raise its prices if regulators don't extend a three-year price freeze promised as part of the Sirius-XM merger in 2008. That provision expires at the end of July unless the FCC extends it. Sirius XM didn't say when a price increase could kick in and how high it could be, but Karmazin said it would be above inflation levels and help the company amid continued spending on such marquee content as Stern, Oprah Winfrey, the NFL and Major League Baseball.

During the first quarter of 2011, SIRIUS XM generated $18.1 million of cash from operations compared with a cash consumption of $37.7 million in the prior-year quarter. Free cash flow (cash flow from operations less capital expenditures) in the reported quarter was a negative $16.8 million compared with a negative $127.2 million in the year-ago quarter.

Karmazin on Tuesday also touted the subscription revenue the company attracts. He calculated that terrestrial radio giant Clear Channel makes $13.61 per listener per year, while online streaming service Pandora makes up to $4.59 from active listeners. Meanwhile, Sirius XM made $141 per subscriber last year, he said.

Quarterly total revenue of $723.8 million was an improvement of 9% year over year, and slightly below the Zacks Consensus Estimate of $726 million. The year-over-year revenue growth was primarily attributable to an increase in the subscriber base, higher sale of "Best of" programming, and rate increases to the company's multi-subscription and Internet packages.

Quarterly total operating expenses were $559.7 million compared with $538.6 million in the year-ago quarter. Operating income, in the first quarter of 2011, was $164.2 million compared with an operating income of $125.1 million in the year-ago quarter. Quarterly adjusted EBITDA was $181.4 million compared with $157.8 million in the prior-year quarter.