Announcement beat analysts' predictions, pleased investors
XM Satellite Radio stock spiked 16% Monday to close at $13.17 after it announced it had reduced losses for the third quarter from $134 million to $84 million, a significant reduction compared with losses the company had previously racked up.
Announcement beat analysts’ predictions and pleased investors, who have worried the company’s costs were outstripping its ability to draw revenue from customers.
XM now has 7.2 million subs, giving it a sizable — though not enormous — lead over rival Sirius, which was close to 5 million subs in its most recent disclosures.
XM also said it was on the path to profit for the fourth quarter.
But perhaps the best news, said analysts, was no news; investors had been worried the company might make negative announcements about subscriber numbers or regulatory concerns, as it had in recent months, and the fact that it didn’t was cause for celebration.
Its stock, however, is still well below its 52-week high of $32.