Slumping OEM Sales Temper Satellite Radio Growth Estimates

The Auto Sales And SDARS Relationships report is updated monthly with new sales data that sector watchers may find useful. We now include estimates for penetration rates (installation of SDARS receivers) broken down by brand as well as an estimated number of installations in the OEM channel on a year to date basis. We caution that the installation data is a very rough picture of the situation. Penetration rates are based on production, and this data is based on sales. Please refer to note (3) on the chart below for additional information that is important when considering this data.

In April 2008, eleven of the thirty-five major auto makers saw positive year over year results. This compares to last month where only seven brands saw year over year increases. Through 2008, there have been 4,530,793 vehicles sold. This represents a drop of almost 14% from the 5,258,858 vehicles sold through April of 2007.

The OEM channel is an important sales channel to satellite radio. Slumping sales should represent some concern, but the ramp up of installations is more than offsetting the drop in sales. Still, this does impact the sector as many have begun to temper growth estimates. Prolonged sales woes in the OEM channel will carry a deeper impact to SDARS.

Position - Long Sirius, Long XM, No Position OEMs

Comments

[163888:]

Stinkaroo, porcelain altar thought the information was useless. Then took the time to put it in a 100 esay on it, in disrespectful way. Instead of just moving on to something else. There are hundreds of articles on Tylers site that I personally dont find interesting, I dont take the time to right in the comments section of each one saying so. It is just plain disrespectful to Tyler, and others that do find it interesting.

2008 May 05 02:12 PM

[cos1000:]

Tyler, I agree that "in its current state the data doesn't have any real meaning", but isn't that true of all data as it stands alone. As you also stated, to be useful the data must be applied to a formula that allows it to be comparative and then measured over time. Whatever that formula is, it gives substance to the reason to invest in or stay away from a particular equity.

So thanks again for providing us with the "Meaningless Data until Intelligently Applied" in your article above. I think this label should be adopted for all hard data presented for now on.

2008 May 05 02:28 PM

[cos1000:]

163888...To change your focus for a bit....In your last post to me about NM, were you saying waiting until after the dividend payout is probably not wise due to the China negotiations? If so, I could just get in now, because I do see a good growth story there.

2008 May 05 02:53 PM

[User 168418:]

Tyler once again thanks for the info you have given us as in the past I thanked you. as i also have stated am bullish on siri and expect it to be at $5.00 a share after FCC does its thing.

2008 May 05 03:03 PM

[stinkaroo:]

163888... Porcelain may have been wordy in his comment, but he wasn't disrespectful. You were the disrespectful one and I find it humorous that you would bash someone for writing a comment on here. Again, I'm not arguing with you the validity of the article or taking sides on whose opinion is correct... I'm saying that you are a Pot calling a kettle black and you need to step down from your high horse. Get over yourself man. Read his post again... he simply states his opinion that the data isn't valid because of variables that can't be calculated.... he did call the guy "dude" at the beginning... perhaps thats what bunched your panties up...

2008 May 05 03:16 PM

[163888:]

cos1000, My feeling is yes, that it will most likely go up from this point more then a drop after the dividend will take it down. First of all the divdend is not that big, compared to something like DSX. Second the drybulk index is going up for many reasons but I think the biggest is China is almost all done with negotiations on iron ore. It is to bad we did not have this discussion a month and a half ago. I would feel alot better saying you should buy. Even if it does go down in the short term, it should go way back up. Be careful though because it has been trading in a 9 to 12 aprox. channel. I would suggest buy half now and wait to see if it gos to 11 if that happens it may hit 9 again, and if that happens double down you will most likely be happy. One last thing although the U.S. economy has nothing to do with how well the dry bulk industry does people trade these on emotion. A example is if you look at the stats of almost all these companies in the dry balk industry there is no reason for them to be as low as they are right now or have been ( P/E, Dept is low, plenty of cash on hand and cash flow, revenew, and margins are way up). I am just saying, look for yourself, there are no sure things in life.

2008 May 05 03:35 PM

[cos1000:]

163888.... Thanks for your feedback, I find this industry to be an interesting one, and at a $12 handle (or $9) a good entry point to learn my lesson. We all know what the only sure things in life are, and ironically and unfortunately most of them are not pleasant....

2008 May 05 03:53 PM

[163888:]

No problem cos1000, NM up .36 today, might go down tomarrow, its been up the last three days to 12.53 from 11.00

2008 May 05 04:25 PM

[mudslinger:]

Why won't the FCC at least provide guidance as to when they will finally make a decision? It's one thing to have held these two companies hostage for such a long time, but are you telling me the issues are so complex they can't even venture a guess as to when they will make a decision? It seems truly unjust to keep these two companies dangling in the wind with no idea as to when there will be a resolution.

2008 May 05 04:36 PM

[cos1000:]

Stinkaroo.... As I have a drink to enjoy my day coming to an end... What's up? 163888 is a passionate investor and needs no defense from me for his comments, but I wonder why you defend porc...alt... with such passion. Come on with a "handle" that represents a bad night out, or a meal gone wrong, I should think he can take it....as well as give it.

I do agree that his comments were not that outrageous to some, but if you value hard data, and you are a data cruncher and serious investor......hearing that in a void of any data being presented by anyone, that its meaningless....well, that too could be interpreted as outrageous and disrespectful by some...Cheers...

2008 May 05 04:46 PM

[163888:]

Stinkaroo, you should read it again, he called the article useless. Now I have said before I have no problem with people commenting in a reasonable manor. If you dont, then dont expect it from me towards you.

Someone has a problem with facts on a article, or disagrees with the content. Such as Tyler used to give SIRI some credit for Infinity because of dealer and port deals they have with them, but was corrected that while that SIRI does have those deal you really cant get SIRI in Infinity. I have no problem with that, and if I disagreed with it I would argue it, in a well manored way. But if someone gets baliturent I will be that way with you. Thats just the way I am.

2008 May 05 04:48 PM

[163888:]

Mudslinger, Martin tried twice, and was wrong as you know. That is crap that they dont have to stick to a time line.

2008 May 05 04:52 PM

[killerkaul:]

RE: cos1000 may 05, 4:46 pm I think the key word was "serious investor". Thank you very much. Tyler, you're the man!

2008 May 05 05:33 PM

[killerkaul:]

Everyone, Here's mud in your eye, from the good old Black Hills of South Dakota.

2008 May 05 05:38 PM

[NotVerySmart2:]

Hi guys... I'm back in this. Kicked some butt today in GOOG, but I wished I would have got out in AM trading (up over $20). I got a strange email message from fcc today, thanking me for my "comment" and indicating that there was some "news" about siri on their site. Without blinking I picked up a quick 12.5k shares @ 2.70 (then) went to find that the article was just a crappy timeline stating that there could be up to 90 more days of bullshit left! Thanks FCC guys! Well needless to say SIRI started to tank so I found my two low ball orders (5k @ 2.66 + 5k @ 2.67) executing (sarcastic - yeay!!). Now I'm in with you guys again, but at least I can directly blame the FCC for helping to keep it's constituents so well informed. Thanks FCC guys! (jerks)



Did anyone else get this email today?



Take Care :-)

2008 May 05 08:47 PM

[Tavares:]

Sirius is not going to reach $5 after the merger is called by the FCC. $4.25 at best. Then once all the cash cows get out, it would inevitable fallback to about $3. I wouldnt suggest getting long this stock. Take your money on the merger and run. You will thank me later.

2008 May 05 09:12 PM

[NotVerySmart2:]

CORRECTION: After looking over the page provided by fcc email, it was actually very good. Has every communication (exparte etc.) on the whole deal. No news about anything though. Wierd.

2008 May 05 09:45 PM

[Tyler Savery:]

Thank you all for your input. Those that have followed my site for some time know that I used to not provide the "install" rate, but rather simply the vehicle sales and the SDARS partners. I had over time received many requests to work the penetration/install rate into the data sheet. As I expressed earlier, that task is quite cumbersome for a number of reasons. I did however want to give an indication of where things stood. Thus, I decided to structure the data in a simple matter that gave a rough indication of where things stood for those that simply want a quick synopsis, and in a way that allowed the number crunchers to follow the data on a month to month basis. The data did require a lage footnote that explains the pitfalls associated with it for those that do not follow it regularly.

One reason I decided to put this information out in the way I have was to give some indication. Both Sirius and XM are not providing guidance at this point, and many, who look at this investment long term, are left to make their own assumptions, or rely on an analyst that may not be in tune with all of the inner workings of these deals.

Perhaps more important than the sales data is the revenue share, subsidy, and cash flow situation of these deals, but that is another article entirely. I have covered that issue in the past on my site.

2008 May 05 10:37 PM

[killerkaul:]

RE: NotVerySmart, Glad to see you back in the line. Your sword and shield are where you left them. LONG SIRI!!!

2008 May 06 10:45 AM

[killerkaul:]

HEY 163888, You're missing all the fun on Tyler's new article!

2008 May 06 11:52 AM