Reverse Stock Split Called Unlikely as Sirius XM * Reports Q4 Profit
Sirius XM probably won’t pursue a reverse stock split to get back into compliance with NASDAQ’s listing requirements, executives said on an earnings call Thursday. NASDAQ had warned the company in September that its stock must trade above $1 for 10 straight business days by March 15 or risk delisting.
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A rise in the price above $1 Feb. 17 -- where it has remained since -- made additional maneuvering to maintain the listing less likely, company executives said. The company previously received shareholder approval to proceed with the reverse stock split. If the stock fails to stay above $1, the company can file for a six-month reprieve, it said.
Sirius XM had $14.2 million in Q4 net earnings, the first profit for the company since it was created by a merger and a turnaround from a $245.8 million pro-forma loss a year earlier. Quarterly revenue grew 6 percent to $684 million, the company said. The revenue growth came largely from a U.S. music royalty fee introduced during the quarter and from price increases for multi- subscription and Internet packages, the company said. It had said earlier that it picked up 257,000 subscribers in Q4, to end the year with 18.8 million. Chief Financial Officer David Frear said he expects subscriptions to increase 500,000 in 2010.
For 2009, the company had a $342.8 million loss, down from $5.3 billion. Revenue was $2.5 billion, up 4 percent, it said. Satellite and transmission costs fell $17 million because of reduced maintenance and personnel costs. Programming and content costs decreased $76 million because of the merger’s completion and reductions in personnel including on-air talent.
Sirius XM continues to see the used-car market as the next major source of subscriber growth as new-auto sales remain slow. Because of the merger, the company said, Toyota’s problems won’t affect it much. Sirius has deals with nearly all the car makers, so it doesn’t feel shifts in auto market shares much, said Sirius CEO Mel Karmazin.
Sirius XM has been happy with on-air personality Howard Stern, Karmazin said, and will leave discussion of their contract negotiations to Stern on his show. Asked about further business with Liberty Media, which owns 40 percent of Sirius, Karmazin said it’s up to Liberty executives to discuss what they want to do with their shares.