NEW YORK — Shares of Sirius Satellite Radio jumped by nearly 10% Wednesday after the company posted a net profit for the first quarter of 2003 and a significant boost in subscriber rolls for its flagship subscription-radio service.
Perf was a much-needed piece of good news for the fledgling sat-radio operator, which had struggled with heavy debt loads, an unproven business model and stiff competition from rival XM Satellite Radio over the past two years.
Sirius said it pulled to a profit of more than $140 million in the quarter, compared with a loss of almost $80 million in the same period a year earlier. Revenue climbed to $1.6 million from just $33,000 last year, before the company had fully rolled out its national service.
Most of that profit came from a one-time gain associated with a debt-for-equity swap that eliminated more than 90% of Sirius’ debt load earlier this year. Still, shareholders were pleased: They pushed the stock up 9.7% to close at $1.35.
Company said its subscriber numbers climbed by 38,000 in the quarter to reach a total of 68,000. Sirius hopes to have 100,000 subs by the end of 2003, thanks in part to a vigorous print and TV ad campaign, but that’s still far short of XM’s claimed 500,000 subs.
Both services offer roughly 100 channels of digital music, news, sports and talk programming for a monthly subscription fee. XM charges $10 per month with some commercials, while Sirius channels are commercial free for $13 a month.