RBC Capital Anticipates 'Dismal Subscriber Trends' for Sirius XM

RBC Capital analyst David Bank has weighed in with a new report on Sirius XM Radio (SIRI). The analyst ranks Sirius XM as a SECTOR PERFORM, and as yet is not quoting a price target. As one of the few analysts still issuing reports on Sirius XM, Bank garners a lot of attention, and given that the Q1 conference call is fast approaching, his may be one of the few reports that goes into detail on the quarterly report.

Bank notes that while liquidity concerns have largely subsided because of the Liberty (LCAPA) deal, the comfort level of investors is still hampered by a tough auto/consumer market. Because of this, Bank anticipates “dismal subscriber trends”. Bank notes that the focus of investors will likely shift to fundamentals from liquidity issues, and RBC does not think the current operating environment bodes well for Sirius XM.

David also points out that auto sales have tracked at a compressed level throughout 1Q (less than 10mm SAAR), and April saw the annualized rate decrease further to 9.26 million. He stressed that these indicators could demonstrate that the auto industry is unlikely to experience a quick turnaround.

On the subject of churn, Bank sees a typical seasonal uptick. Personally, I also see churn as well as overall deactivations going up, more from the condition of the economy than the seasonality of the business. RBC now expects a net loss of (69,000) subs in 1Q09 and just 62,000 net sub additions for all of 2009. Personally I see a much higher drop in subscribers. We will know more on Thursday.

Other metrics visited by Bank include FY09 revenue/adjusted-EBITDA estimates of $647mm/$73mm and $2,586mm/$296mm, respectively. Bank notes, “Despite sluggish subscriber growth tends, impact to revenue/EBITDA should be minimal. While we have lowered our subscriber growth assumptions for the year, given ~19mm existing subscriber base, prior minimal net sub addition assumption, and continued realization of cost synergies, our revenue and EBITDA estimates for FY09 remain relatively unchanged.” This is likely going to be a major part of the Sirius XM presentation. If the company can demonstrate that even despite sluggish subscriber performance, and a very downturned economy, they can hit the adjusted EBITDA numbers, the viability of the business is in good shape.

Position - Long Sirius XM Radio

Comments

[burnout:]

OK. Too much yelling and name calling. I'm going to go play somewhere else.

May 06 08:45 AM

[BChargers:]

On May 06 08:45 AM burnout wrote:

> OK. Too much yelling and name calling. I'm going to go play somewhere
> else.

I know where you can listen to 20 year old recordings of farts for
only $13.00 a month. WITHOUT standing in line.
LMAO@U

May 06 08:55 AM

[underway:]

Really? I didn't know that, but, that doesn't make sense from a journalist perspective. If you submit a piece with a headline and the publisher wishes to change it, there's supposed to be a discussion. And, I don't think I'd submit something without a headline and leave it up to the publisher to write their own. Publisher has editorial rights, understood. But, as a reporter, you don't have to surrender all of your rights. If I were reporting and a publisher said it's 'my way or the highway', I'd hit the road and find another publisher. Headlines are huge and it can change the take on the article since the reader is predisposed by the headline. I would never allow anyone to simply make whatever changes they want to my work without a discussion and my right to pull the piece if agreement can't be reached. that's just me.


On May 06 08:29 AM still sirius wrote:

> underway
>
> Seeking Alpha actually changes the headline! That is not the headline
> that Tyler had on the original article!
>
> aware
>
> Go away- D...bag
>
> Bcharger
> If people do not want it, how is it that #4 selling app at ATT. Your
> a joke!

May 06 09:00 AM

[burnout:]

Original title was...
"RBC Capital’s David Bank Weighs in on Sirius XM"

May 06 10:23 AM

[wholesalecd:]

nice article Tyler but the name of the article should have been "DOOMSDAY THURSDAY"

Subs will be down dramatically and revenue will also. While subscriber and operating costs will be down this will not offset the negative numbers already being surfaced.

Thank you Tyler for a very informative literature.

jay boy billy

May 06 10:32 AM

[burnout:]

Up 35% so far this week. Sorry to any of you that followed someones advice.

May 06 11:32 AM

[BChargers:]

On May 06 11:32 AM burnout wrote:

> Up 35% so far this week.

Another 23% up and it will be where it was LAST WEEK.

PEOPLE DON'T WANT IT.
LET THAT SINK INTO YOUR HEAD

May 06 12:08 PM

[Content seeker:]

Again... I write ... look for an increase from 4th quarter subscribers, than what will those say that have been citing a dismal projection. Again MLB is around the corner, they need to attract the young crowd. Sirius will come to the phone where they will be able to reach this sector. We need to think outside the box.

May 06 12:25 PM

[wholesalecd:]

There's a PUMP AND DUMP scheme going on right as we blog.

Sell now and get out of this mess before the shit hits the fan tommorrow.

It won't be pretty.

jay boy billy

May 06 12:55 PM

[User 408532:]

Sirius is making a deal with Apple for downloads on the iphone and ipod without the neccesity of new equipment. In addition they have announced that DishTV (owned by Liberty) will also have the capacity to carry the Sirius signal. The company is certainly looking to make up for the loss of auto subscribers. Chrysler/Jeep include one year free with the purchase, so that does not affect the bottom line. Mercedes on the other hand does not include any free time. All in all when one considers what Malone did this week with the breaking up Liberty into various groups the only result can mean enhanced income and visibilty for Sirius.(they did not acquire 40% without knowing they were making this play) Once the reallocation of the company is approved by the FTC and the FCC late spring/early summer. DishTV is primed to be bought by At&T and Sirius can only benefit from that move either way. For what the cost is and the fact we know that Sirius is not going away, anyone not bullish now will be sorry later when the price increases in anticpation of these transactions.

May 06 01:11 PM

[User 368600:]

One of you SIRI types predicted or guessed $.52 cents today.
Nice call. I hope since you were smart enough to nail the high,
that you were also smart enough to bail.

Do you smell something funny?

May 06 04:19 PM

[Tyler Savery:]

I dont make the headlines on Seeking Alpha. If you will note, the original article published on my site carries the headline "RBC Capital's David Bank Weighs In On Sirius XM"


On May 06 08:08 AM underway wrote:

> why the hell would you make the headline 'dismal subscriber trends'???
> as opposed to 'sector perform'??? Do you want to see if your article
> can cause the stock to go down? Perhaps an experiment to gauge your
> media power?
> I know that those aren't your words, and you are merely reporting
> on what the analyst said...but...c'mon man, why use hyperbole in
> your headline? And it would be equally irresponsible to use an over
> the top positive headline as well. Like the National Enquirer I guess.
> Such BS.

May 06 05:03 PM

[Tyler Savery:]

Having an opinion before the call is what analysts get paid to do. They will also issue reports after the call. I do not make buy sell or hold calls. I am not a financial advisor. I do offer an opinion, and you have every right not to agree with it.

A major part of investing in the markets is to try to anticipate activities before they happen.


On May 06 07:50 AM sl62 wrote:

> Tyler...
>
> My only comment here is WhyTF is "David Bank" or "you" conjecturing
> about the Q, opining on "sector perform" or anything else related,
> the day before the actual Q????? A little advice to both of you.
> How about waiting a day my friend...and lo and behold...you actually
> will have the real facts and won't have to conjecture. That's a whopper
> of an idea isn't it! Or..what is this exercise for you and Dave..a
> bad attempt at trying to prove you know more about the company than
> the company??! Probably. Sorry, both your timing falls flat. I'll
> just wait for Mel to tell me what's really going on tomorrow morning.

May 06 05:06 PM

[Tyler Savery:]

Underway.....

Most reporters never gut to write their own headline. For the record, I do not submit articles. The agreement with Seeking Alpha allows for them to use articles from my site at their choice. They do not republish all of my work.


On May 06 09:00 AM underway wrote:

> Really? I didn't know that, but, that doesn't make sense from a journalist
> perspective. If you submit a piece with a headline and the publisher
> wishes to change it, there's supposed to be a discussion. And, I
> don't think I'd submit something without a headline and leave it
> up to the publisher to write their own. Publisher has editorial rights,
> understood. But, as a reporter, you don't have to surrender all of
> your rights. If I were reporting and a publisher said it's 'my way
> or the highway', I'd hit the road and find another publisher. Headlines
> are huge and it can change the take on the article since the reader
> is predisposed by the headline. I would never allow anyone to simply
> make whatever changes they want to my work without a discussion and
> my right to pull the piece if agreement can't be reached. that's
> just me.

May 06 05:10 PM

[sl62:]

Tyler...

As you know, I have no problem with you having an opinion and respect your take on the company. But the timing of Bank issuing a "sector perform" and you reporting on it seems suspect. I mean c'mon. If you are an analyst (hypothetically), why aren't you waiting until AFTER the Q to offer your opinion and how it relates to the SP and space. Again, if this was just you giving your opinion, I have no problem. IMO, you reporting on Bank the day before the actual Q specifically is ill-timed and your only crime. How does he know the actual numbers to make these calls? And if he doesn't know the numbers, and they are a day away, why doesn't he just wait a day and actually base his opinions on facts rather than his comjecture based on "projections" and "trends." Sorry but no soap for David Bank and unfortunately you bit on a bad bone here.


On May 06 05:06 PM Tyler Savery wrote:

> Having an opinion before the call is what analysts get paid to do.
> They
will
> also issue reports after the call. I do not make buy sell or hold
calls.
> I am not a financial advisor. I do offer an opinion, and you
have
> every right not to agree with it.
>
> A major part of investing in the markets is to try to anticipate
> activities before they happen.

May 06 06:22 PM

[sl62:]

Tyler...

I just re-read your opening line to your response. Yes, they might be paid to have an opinion before the call...but making a decisive "sector perform" call a day ahead of the Q call is irresponsible. Makes no sense. Those calls are to be made AFTER the Q call with all the current facts on the table. Or is he just being lazy?


On May 06 06:22 PM sl62 wrote:

> Tyler...
>
> As you know, I have no
problem
> with you having an opinion and respect your take on the
company.
> But the timing of Bank issuing a "sector perform" and you
reporting
> on it seems suspect. I mean c'mon. If you are an analyst
(hypothetically),
> why aren't you waiting until AFTER the Q to offer
your
> opinion and how it relates to the SP and space. Again, if this was
just
> you giving your opinion, I have no problem. IMO, you reporting on
Bank
> the day before the actual Q specifically is ill-timed and your
only
> crime. How does he know the actual numbers to make these calls?
And
> if he doesn't know the numbers, and they are a day away, why
doesn't
> he just wait a day and actually base his opinions on facts
rather
> than his comjecture based on "projections" and "trends." Sorry
but
> no soap for David Bank and unfortunately you bit on a bad bone here.
>

May 06 06:27 PM

[sl62:]

wholesale...

Generally you have little cred..based on your calls back @ .13. But any shred you may have left will be up for grabs tomorrow morning. We shall see. I'll be back then to settle up.


On May 06 12:55 PM wholesalecd wrote:

> There's a PUMP AND DUMP scheme going on right as we blog.
>
> Sell now and get out of this mess before the shit hits the fan tommorrow.
>
>
> It won't be pretty.
>
> jay boy billy

May 06 06:30 PM

[Tyler Savery:]

SL62....

Analysts always do pre call reports, and RBC maintaining their sector perform rating should not be a surprise. They have had a sector perform on the equity for quite some time.

As for me reporting it.....I simply report things when they come out. Bank reported yesterday, Barrington and Janco today. I gave my own take last Friday. If I were to not report it, what kind of reporting would that be?


On May 06 06:22 PM sl62 wrote:

> Tyler...
>
> As you know, I have no problem with you having an opinion and respect
> your take on the company. But the timing of Bank issuing a "sector
> perform" and you reporting on it seems suspect. I mean c'mon. If
> you are an analyst (hypothetically), why aren't you waiting until
> AFTER the Q to offer your opinion and how it relates to the SP and
> space. Again, if this was just you giving your opinion, I have no
> problem. IMO, you reporting on Bank the day before the actual Q specifically
> is ill-timed and your only crime. How does he know the actual numbers
> to make these calls? And if he doesn't know the numbers, and they
> are a day away, why doesn't he just wait a day and actually base
> his opinions on facts rather than his comjecture based on "projections"
> and "trends." Sorry but no soap for David Bank and unfortunately
> you bit on a bad bone here.

May 06 07:17 PM

[Ron the Rocket:]

BCharger -

Get ur head out of your arse...you don't know what your talkin' about. SIRI is the second best technology in the last five years, second to the iPhone. I just got the iPhone...amazing...but... know what my uneducated friend? I still use my SIRI almost the ENTIRE time i'm in my vehicle. It's better, it's easier, it's a great service. Already 19,000,000 subs...wait five years until they figure out home service and the auto industry comes back...we will be at 25,000,000 soon. You're a dope...they don't want it, huh? Right...


On May 06 08:09 AM BChargers wrote:

> PEOPLE DON'T WANT IT LET THAT SINK IN

May 06 07:43 PM

[BChargers:]

On May 06 07:43 PM Ron the Rocket wrote:

> BCharger -
>
> Get ur head out of your arse...you don't know what your talkin' about.
<<
I do know what I am talking about
<<
> SIRI is the second best technology in the last five years,
<<
NO its not.
second
> to the iPhone. I just got the iPhone...amazing...but... know what
> my uneducated friend? I still use my SIRI almost the ENTIRE time
> i'm in my vehicle. It's better, it's easier, it's a great service.
> Already 19,000,000 subs...
<<
Sirius GIVES AWAY THOSE SUBS
iPhone DOESN'T
>
wait five years until they figure out home
> service and the auto industry comes back...we will be at 25,000,000
> soon.
Blah blah blah. . . I heard that five years ago.
>
You're a dope...
<<
No I'm not. I border genius. I dont pay money to listen to farts.
Who's the dope?
>
they don't want it, huh? Right...
<<
RIGHT. PEOPLE DONT WANT IT
LET THAT SINK INTO YOUR HEAD

May 06 11:41 PM