Sirius XM (SIRI) is testing new highs going into its Q4 conference call. The Q4 earnings report is scheduled for Tuesday, February 6th. For well over a week now, the equity has been trading on unusually light volume. Today (Friday), on a pop up above $3.20, Sirius XM is seeing greater volume, perhaps a signal that there is at least some strength in the move.
The pending conference call is not expected to yield any big surprises. Sirius XM previously announced that it had exceeded 2 million subscribers for 2012, issued 2013 guidance, and advised the Sreet that it had met or exceeded all 2012 guidance.
This leaves the only real possible surprise to the EPS. While analysts seem to expect two cents, I feel that some NET Operating Loss reporting could get this company another two cents. Thus, if we exclude the NOLs, Sirius XM should meet the 2 cent expectation with relative ease. I actually think that there is a decent shot at a 5 cent quarter with the NOL's included. That could cause a bit of a run- depending on how the media handles the headlines.
The other major factor to watch for is how new Interim CEO Jim Meyer performs on the call. His predecessor, Mel Karmazin, was a titan in the media sector and this is the first time Meyer will be acting as a CEO. Karmazin had big shoes to fill. Meyer does not need to put in a stellar performance. What is needed is a solid performance that outlines the progress of the company and a well handled question and answer session. We should not expect a major shift from the Karmazin plan, but rather tweaking nuances as Meyer puts his own fingerprint on Sirius XM.
The cautions investors need to consider are rather simple. There is a bit of excitement and uncertainty in the new Meyer-led and Liberty Media (LMCA)-controlled company. It seems that the Street is anticipating a steady course for the equity moving forward. Unless some huge shift happens, the Q4 report should be enough to establish a decent foundation above $3.20 from which to build.
Look for solid Q4 numbers. I do not see that any of the 2012 financial guidance will be a blowout compared to the guidance we were working with. The Liberty Media control subject will likely be broached and we may see some flavor on share buybacks. The bigger news of the day will probably be the EPS, which I expect will beat the Street. Overall, 2012 will go down as a successful year and we will now get some flavor on what 2013 has in store.