Revenue is up but so are losses at XM Satellite Radio, which reported third-quarter financial figures.
XM reported revenue of $287 million for the quarter; that compares to $240 million for the period a year ago and represents about a 20% increase.
But expenses associated with the potential merger with Sirius and continued softness at retail for aftermarket receivers expanded XM’s quarterly loss to $145.3 million, up from $83.8 million.
The satcaster reported a quarterly adjusted operating loss (formerly adjusted EBITDA) of $47 million; that compares to a loss of $2 million a year ago. Of the $47 million loss, $9 million is merger-related.
“The Street is focused on the probability of the merger while ignoring the fundamentals,” cautioned Banc of America Securities analyst Jonathan Jacoby in a note to subscribers.
The company remains optimistic the merger with Sirius will close by year-end and continues to work with the FCC and Justice Department to demonstrate the deal is in the public interest, it said.
Churn is at 1.69%, down from 1.8%, while subscriber acquisition costs were $70 for the quarter. Jacoby stated that both churn and SAC costs were better than predicted.
XM ended the quarter with approximately 8.57 million subscribers, up from approximately 7.19 million subscribers a year ago.
