By Brandon Matthews
Audiovox (VOXX) reported mixed overall results, citing strength in Sirius XM (SIRI) Satellite Radio sales as a primary driver of its first quarter sales results. Audiovox’s first quarter results consist of sales data from March 1, 2009 through May 31, 2009. The following transcript is from Seeking Alpha:
Uncertainty in the new car market resulted in first quarter sales that were off roughly 20% compared to last year. We did experience an increase in Sirius XM satellite radio products but unfortunately it wasn’t enough to offset the overall weakness in the automotive market. We fully expect satellite radio to continue to be a sales driver this year and new product introductions with Qualcomm’s (QCOM) flow TV, mobile video with Sony (SNE) PlayStation built in both slated for fall launch, as well as our new custom mobile multimedia radio line all should help offset continued market weakness.
Audiovox issued forward looking statements which anticipate an increase in Satellite Radio sales as the year progresses stating “…we expect margins to average more to our normal 17.5% to 18% levels as sales of the consumer and satellite radio products increase as we move into the year.”
Although Audiovox reported weak results partially attributed to General Motors (GMGMQ.PK), the overall drop of only 20% is better than expected, on auto sales that have been off much more significantly. When considering Audiovox’s results it is important to consider that March was a crossover month in that Sirius XM has already reported its first quarter results which ended in March. Sirius XM’s first quarter runs from January 1 through March 31. Subsequently Sirius XM will be reporting its second quarter results to include data from June 2009, which is excluded from Audiovox’s first quarter.
Despite the crossover, Sirius XM investors will be pleased to learn that Satellite Radio is again not only showing signs of life but also, signs of strength.
Position: Long SIRI