Karmazin bullish on Sirius XM future
Soon to overtake Clear Channel as largest radio companyNewly minted Sirius XM Radio, with 18.5 million subscribers and counting, soon will overtake Clear Channel Communications as the nation's largest radio company, Mel Karmazin told analysts Thursday.
Even with slumping auto sales in the U.S., the CEO of Sirius XM said the company will add a minimum of 3 million subs from automakers alone next year, generating $350 million in new annual revenue.
Sirius, in its last quarterly financial report as a stand-alone company, lost $83.9 million, less than the $134.1 million it dropped a year ago. Revenue rose 25% to $283 million.
Karmazin also lamented the dismal performance of Sirius stock despite all the bullish implications of a merger that will result in $400 million cost savings next year alone.
Sirius shares are off 54% this year and fell 3.5% on Thursday to $1.40. The depressed price had Karmazin purchasing 2 million shares this week, giving him 8.5 million and options for 30 million more.
Karmazin also promised radios that can play both XM and Sirius would be available in the coming months, earlier than expected. A la carte pricing, though, is more problematic because new radios are needed and automakers might not see the value in pushing such hardware to consumers.
Nevertheless, a la carte radios at the retail level should hit stores in the fall, he said.