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

[Astronut]

looking good for the merger...doesnt matter what vehicle you own if you live in the mountain region........its the only option there

[ripped]

dude, none of this really matters until the merger takes place and we have some clarity going forward.

There are all sorts of new ways this mergered company is hoping to grow and re-make itself and the OEM numbers are simply moot until the bigger picture is defined.

Also, do not underestimate the number of people on the sidelines who would love a combined service and are simply waiting for what's going to happen so they know where they want to be as a subscriber.

There will be multiple models for growth and revenues going forward that complicate a simplistic reliance upon OEM numbers.

[163888]

Porcelain alter, Holy crap give Tyler a break. He is putting out information that some use along with NPD that he also puts out, to get some idea of subcriber growth in the current quarter. I personally would like to have the information, then not. So with all due respect "shut your cake hole".

[ripped]

With minimal respect 163888 numbers are simply not very relevant at this point in time. We know auto sales are down and we know unless it's given away that no one knows what to subscribe to at this point.

What's the use of having data that is really skewed and with minimal forcasting potential going forward.

I'll have my cake and eat it too while you can zip your useless pie-hole and pour over insignificant numbers.

Later. . . as in much. Give me your address and I'll forward you a dime so you can buy a clue.

[User 168418]

Porcelain Altar you couldn't have said it better .........thank you

[User 168418]

I'am bullish on Sirius and Xm $5.00 on good news from the FCC on the merger

[163888]

porcelain alter, and 168418, You both give new meaning to "ignorance is bliss". The information is there for those who want it, if you dont think it is important enough to read then dont. I really dont get how you can think the information is useless and not worth readiing then take the time to make a comment. You both, also give new meanimg to oxymoron, Opps, I'm sorry, your names just appeared under the definition of oxymoron.

[cardman]

I have been reading several comments on Satalite Radio and I have come to the conclusion that (including myself and the so called professionals) no one knows their ass fromtheir elbow on Satalite Radio.I am an investor in Sirus because they have gone from 335,000 members in 05 to over 7 million currently. With that type of growth, the future numbers indicate a sound financial investment.

[cos1000]

Thank you Tyler for providing us with this very useful data at a time when the companies and, truthfully, the analysts of these companies have provided very little.

As always, some folks here have decided to attack or dismiss the data. As stated, this information is provided monthly, and gives incite into where the companies are succeeding and where they clearly need to do more work. The fact that for the first time we can get information into the penetration rates is wonderful. Up until now all we've had to go on is total vehicle sale info.

I blasted the Stifel Analyst a few weeks ago for basing his re-evaluation of revenue from OEM on total sales, not total sales adjusted for increases in penetration rates. If anyone thinks this data is irrelevant then they really shouldn't be investing in these two stocks. OEM is now and will be in the future the bread and butter for the merged company to grow. I agree that the data will change post merger, but having baseline penetration data by manufacturer is terrific info. Look at the data above for Toyota, Nissan, Kia and Chevrolet and tell me you can't see where growth can come from.

Please Porc.. Alt.. and 168418...."doesn'... really matter....", "couldn't have said it better"... what's your real gripe? The data, or understanding what it really means.

Some of us who are heavily invested and are given nothing but manipulative comments, backed up with nothing more than supposition, welcome hard data. So thank you again Tyler for giving this data starved investor a much needed meal.

[Tyler Savery]

I will say this. I present the data so that people can choose to apply it to their own estimates and work. My spreadsheets on blended penetration get quite complex because of the differing deals, differing ramp rates, and trying to apply churn. The work I personally do gets so complex that it becomes hard to explain out in an article. Thus I struggled with a way to present data to readers that want to go through their own calculations, while at the same time trying to keep it useful enough from a cursory vantage point. In its current state the data does not have any real meaning. Those that want to apply themselves and dig deeper have a baseline from which to compare. This is why I present it monthly. People can then see penetration changes, sales changes, etc.

Simply stated, this data is a starting point for anyone who wants to take the next steps for themselves. Being able to project into next quarter or how things will stand at the end of the year does have value for some people. With no company guidance, this type of information at least lets someone be a bit more informed.

Thank you all for your readership regardless of whether you find the data meaningful.

[stinkaroo]

163888 attacked Porcelain for no reason... I agree that the data is important but I don't see where porcelain made any comments in his original post that called for 163888 to tell him to shut his pie hole. Sheesh... bunch of bullies on here. All he seemed to be saying was that the hard data is somewhat misleading because he believes there are important varibles that aren't represented. 163888; go have a drink and cool off...

[163888]

That is correct, and How it helped me come to an estimate of 502,000 subcribers for the 1st quarter of 2008 for SIRI, and 359,000 for XMSR. Now those are my personal estimates, and have never been right on, but I get dam close. All because of this, and other information. Once again the information is there for those who want it. If you dont, then as cos1000 once said; move on.

[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.

[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.

[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.

[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.

[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...

[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.

[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....

[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

[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.

[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...

[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.

[163888]

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

[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!

[killerkaul]

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

[NotVerySmart]

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 :-)

[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.

[NotVerySmart]

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.

[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.

[killerkaul]

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

[killerkaul]

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