Sirius chief endorses Cash for Clunkers
Karmazin: program helps an 'improving' auto marketCash for Clunkers has a fan in Mel Karmazin.
The CEO of Sirius XM Radio said the controversial government program that pays consumers up to $4,500 for trading in their gas guzzler for a more fuel-efficient car has contributed to an "improving" auto market -- and most new cars come equipped with a satellite radio.
"Production schedules are resuming, Cash for Clunkers programs are working, and we are cautiously optimistic that the second half of 2009 will show improvement," Karmazin said Thursday.
If he's right about a recovering market for new cars, it couldn't come at a better time for Sirius XM, which reported Thursday that it lost subscribers for the second consecutive quarter.
Sirius posted a net loss attributable to shareholders of $157.4 million, up from a loss of $83.9 million a year ago. Revenue rose 1% to $607.8 million.
The company lost 186,000 subscribers, ending the quarter with 18.4 million. Revenue increased because each subscriber spent an average of $10.66 a month on Sirius XM, up 11 cents from a year ago.
Only $12.6 million of the company's revenue came courtesy of advertising, down 33% lower from a year ago, which was to be expected given the crummy advertising economy. But ad sales were actually up sequentially, which could suggest the beginnings of a rebound.
Karmazin noted that last week was the one-year anniversary of the Sirius-XM merger. While praising the synergies and economies of scale brought about by that combination, he bemoaned what he called "the most difficult business environment in recent history."
The exec boasted that the company notched $132 million in adjusted income from operations, its third positive quarter in a row on that basis.
Sirius XM also raised its full-year outlook to more than $400 million in adjusted income from operations, up from $350 million previously.
Sirius reported its results prior to trading Thursday, and its stock fell a penny to 53 cents.