Sirius, XMSR Shares Jump On Positive Sirius Subscriber, Cash Flow News

Shares of Sirius Satellite Radio rose 5.7% yesterday on positive news from the company - as did shares of rival XM Satellite Radio, which jumped nearly 5.3%. Yesterday Sirius reported that it had added 2.7 million net additions during 2006 for a total addition of 82%. The company broke the six million subscriber mark while turning free cash flow positive for the first time during 4Q'06. Analysts who cover Sirius at Stanford Group and Cowen & Co. saw the news as wholly positive. However, an article on Motley Fool argued that "it's not all roses in the Sirius camp", pointing out that subscriptions were actually down year-over-year from 1.1 million to 900,000 in the 4th quarter. Without another huge subscriber boost in 2007 (like signing on Howard Stern at the beginning of 2006), Sirius' numbers may continue to struggle. XM Satellite will likely report its 4Q'06 subscription numbers before Monday. Shares of both companies were down 47% in 2006.

• Sources: Bloomberg, Motley Fool, MarketWatch
• Related commentary: The NY Times Discusses the Prospects for a Sirius-XM Merger, Sirius and XMSR Merger Murmurs Continue, XM or Sirius? Why Not Both?, Satellite Radio News Watch: Sirius Lowers Subscriber Guidance, XMSR Inks Deal With GM. Conference call transcripts: Sirius Q3 2006 Earnings Call Transcript, XM Satellite Radio Q3 2006 Earnings Call Transcript
• Potentially impacted stocks and ETFs: Sirius Satellite Radio (SIRI), XM Satellite Radio Holdings (XMSR). Competitors: Clear Channel Communications (CCU), Cumulus Media Inc. (CMLS)

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