Significant customer additions during second quarter of fiscal
2012 have induced satellite radio operator
SIRIUS XM Radio Inc.
) to raise its revenue and subscriber guidance for the full
SIRIUS XM gained 622,042 subscribers during the quarter,
reflecting an increase of 38% on a year-over-year basis. During the
first half of 2012, the company added 1,026,638 subscribers
compared with a total addition of 825,211 subscribers in the
comparable period of 2011. The company has set a target of adding
1.6 million customers during fiscal 2012, of which it has already
achieved nearly 64.4% by the end of first half of 2012.
We believe that the significant subscriber growth was mainly
attributable to the launch of SIRIUS XM 2.0 product suite,
expansion of channel line ups (inclusive of Latin channels)and
higher auto sales. Moreover, easy availability of internet radio
) android-based phones and
) devices has further triggered subscriber growth.
In December last year, SIRIUS XM launched the advanced version
SIRIUS XM 2.0 called "Lynx". Lynx is touted as the next-generation
satellite receiver that allows subscribers to stream content to
home audio systems via Bluetooth. It also features high-resolution
touch screen support and allows 200 hours of music storage, hence
providing more options to the users to access their favorite music
anytime and from anywhere.
On the back of such innovative product launch, coupled with
better management execution, SIRIUS XM remains confident of
expanding its subscriber base by 1.6 million during 2012, up from
the previous guidance of 1.5 million. The company also raised its
revenue forecast for the year to $3.4 billion from the prior $3.3
Currently, SIRIUS XM has a Zacks #3 Rank, implying a short-term
Hold rating on the stock. We are also maintaining our long-term
Neutral recommendation on the company's shares.
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