Tale of two satellite radio firms
Sirius narrows Q1 loss while XM heads southLosses grew at XM and shrunk at Sirius, the satellite radio firms said Monday in announcing what they hope will be their final quarterly financial reports as stand-alone companies.
It has been 15 months since the two said they would merge. The Justice Department gave its OK, but the pair still await FCC approval, and executives at both firms Monday again pitched the virtues of a merged company.
XM CEO Nate Davis called a combined XM-Sirius "clearly in the public interest," predicting a la carte programming, tiered pricing and more family-friendly radio options.
Such enthusiasm isn't shared by the Consumer Federation of America, Consumers Union and Free Press, all nonprofit, public-interest organizations that called on the FCC on Monday to kill the deal.
Without naming names, Sirius CEO Mel Karmazin said he is outraged by anti-merger groups and individuals who use the press to further their own reputations and agendas.
He said the Justice Department slogged through dozens of subpoenas and depositions and were provided 12 million pages of documents before blessing the merger. Meanwhile, the FCC has taken -- so far -- three times longer than normal to make its decision.
Karmazin, also a major shareholder in his firm, expressed solidarity with all Sirius investors, telling them how frustrating it is to own a stock "that is in deal limbo."
Sirius reported a $104.1 million loss in the first quarter, an improvement compared with last year's loss of $144.7 million. Revenue rose 33% to $270.4 million.
XM posted a first-quarter loss of $129.3 million, up from a loss of $122.4 million a year ago. Revenue climbed 17% to $308 million.
XM ended the quarter with 9.3 million subscribers, having added 303,000 net subs in the frame. Sirius ended the quarter with 8.6 million after adding 322,534 net subs.
Both companies complained that a new formula from the Copyright Royalty Board caused the royalties they pay for music played to increase significantly. Sirius said such costs rose 56% to $42.3 million, and XM said they rose 45% to $68.8 million.
On renewed speculation that the FCC is close to approving the merger, Sirius stock soared 5.1% on Monday to $2.87, and XM climbed 4.2% to $12.30.
Brooks Boliek in Washington contributed to this report.