XM Lowers Subscriber Projections for 2006

XM Satellite Radio Holdings Inc. lowered its subscriber projections for the year to 8.5 million, down from 9 million. XM President/CEO High Panero said that, although subscriber growth for the first quarter projections was consistent with the initial 9 million figure, “the satellite radio category has seen an overall softness at retail during the second quarter to date and we have been later than anticipated with broad availability of our new products.”
The satcaster projects it will end the year with subscriber revenues of $835 million and EBITDA loss (excluding stock-based compensation, other income/expense, equity in net losses of affiliates, and loss from deleveraging transactions) of $235 million.
XM said it remains on track to reach positive cash flow from operations for the fourth quarter of 2006 and on an annual basis for 2007.
Reuters quotes Oppenheimer & Co. analyst Thomas Eagan as saying the company’s overall good results in the first quarter were “overshadowed” by the FCC and FTC probes about, respectively, the emissions standards of the Delphi XM SkyFi2 and XM’s marketing practices.
Audiovox also recently stopped shipping the Xpress Model XMCK10 after receiving a letter from the FCC stating that its engineers tested the unit and found that the FM modulator is not in compliance with either the operating bandwidth specifications or FCC emission limits.