Satcaster revs up to $52.2 mil
Sirius Satellite Radio had another fast-growing quarter but once again sank deeper into the red to fuel it.Mel Karmazin-led company nearly quadrupled its revenue from a year ago to $52.2 million as it added 366,000 subscribers in the quarter ending June 30 and upped its projections for the end of the year from 2.7 million subs to 3 million. As of June 30, Sirius had 1.8 million. Satcaster’s net loss was up 30% to $177.5 million, however, as fast growth drove up its costs. Company paid $160 for each new subscriber, down 32% from a year ago but more than triple competitor XM’s cost of $50. XM was able to drive down its net loss last quarter while at the same time upping its end-of-year subscriber guidance from 5.5 million to 6 million. For the full year, Sirius increased revenue guidance from $215 million to $225 million but also upped estimated operating loss from $510 million to $540 million due to the cost of adding more subs. Company is clearly counting on faster growth to move it toward profitability next year after it adds big talent like Howard Stern and Martha Stewart. Sirius also revealed Tuesday that it plans to issue $400 million in senior notes payable by 2013. It plans to use most of the coin for operating purposes after paying off shorter-term notes. Karmazin has previously said he expects to hit profitability by 2007. At its current rate of losses, company’s $577 million cash hoard would make such a goal tight. Raising new cash should help it reach that target, and possibly enable it to spend more on content deals, though Karmazin has previously said he doesn’t plan any more signings as big as Stern’s five-year, $500 million contract. Shares in Sirius fell 3% to $6.75 Tuesday.