XM Satellite Radio Beats Subscriber Target, Posts $122m Loss

25 July 2002

XM Satellite Radio, which went on-air last September, yesterday posted a loss for the second fiscal quarter to June well in excess of that expected by analysts – hitting $122 million (€122.63m; £77.50m) or $1.38 per share, up year-on-year from $44 million (76 cents).

The entrail-rakers had prophesied a loss of $1.29 a share and XM stock promptly plunged in value by $1.25 to close at a 52-week low of $4.00. But there is a faint silver lining to the satellite cloud: during the period subscriptions rose to 136,718 – ahead of its target for the quarter.

In true Panglossian mode, chairman and ceo Hugh Panero declared: “We're pretty pleased [with the earnings report]. We are in a difficult market and we continue to show that we're a product in demand.”

XM also revealed it will market its first premium channel, Playboy Radio from September at an additional $2.99 a month. It also plans to phase-in by the year end its second generation technology with cheaper chipsets.

The broadcaster also reiterated its forecast of enrolling 200,000 subscribers by the end of the current quarter and 350,000 by December 31.

Data sourced from: The Washington Post Online; additional content by WARC staff