April auto sales are in and the headlines read that the SAAR for April shows, for the first time this year fell below 15 million. The industry reported SAAR for April was 14.9 million. While SAAR is a gauge that sector watchers use, it is actual sales numbers and not SAAR that impact Sirius XM (NASDAQ:SIRI). The actual sales for April 2013 came in at 1,283,999 units. This was, as expected, less than March, but about 100,000 above April of 2012.
April, being the first month of the second quarter, is essentially a launch pad for the summer sales figures. May and June usually have sales that are stronger than April with May being the strongest month of the quarter.
What bodes well for Sirius XM is that Q2 auto sales are usually able to top Q1 sales by a good number. In Q1, the company added 453,000 subscribers. As of right now, the pace for Q2 is already stronger than Q1. Simply stated, even with a SAAR of less than 15 million, auto sales are off to a great start as it relates to Sirius XM. This demonstrates potential for the company to be well on the way to a second strong quarter in terms of subscriber additions. This is important because the subscriber addition dynamic will take a turn in Q4 of this year with GM no longer providing paid promotional trials.
In the wake of Sirius XM's recent quarterly call, and the news that the company has already begun to buy back shares, the importance of auto sales could easily get lost in the shuffle. While auto sector headlines may show some minor weakness, the overall story remains quite positive for Sirius XM.
Disclosure: I am long SIRI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.