* Q2 EPS meets Street view 2 cents/shr
* Raises annual EBITDA forecast to $900 million
* Revenue jumps 13 pct
* Wall St awaits Liberty media conference call Wednesday
By Liana B. Baker
Aug 7 Satellite radio operator Sirius XM Radio
Inc posted higher-than-expected quarterly revenue on
Tuesday, boosted by price increases, and raised its earnings
outlook for the year.
Sirius, which competes with free Internet radio services
such as Pandora Media Inc, reported a 13 percent rise in
second-quarter revenue to $837.5 million. The result beat
estimates of $834.38 million, according to Thomson Reuters
Chief Executive Mel Karmazin said the company has been
speaking regularly to Liberty Media Corp, the holding
company led by billionaire John Malone that owns 46 percent of
But on a conference call Karmazin had little to say about
the status of talks with Liberty, which told the U.S. Federal
Communications Commission in May it intended to take control of
Karmazin has been telling Wall Street he will not give up
control without securing a premium for shareholders from
Karmazin, whose contract expires at the end of the year,
also told analysts the perception that he was reluctant to work
for a controlling shareholder was overblown, and that his role
is not an issue in current conversations with Liberty.
Regarding his contract, Karmazin said "the board and I will
deal with it" before the third-quarter conference call.
On Tuesday, he said Sirius was not privy to Liberty's plans.
Liberty has said it is interested in a tax-free spinoff of its
stake in a transaction known as a Reverse Morris Trust.
Liberty also told the FCC in May it wanted to take over a
majority of Sirius' board seats. It currently holds five seats
out of a total of 13.
"Clearly Liberty has to decide what they want to do and
maybe they've done that already, but they have not exactly
communicated that to us," Karmazin said on the conference call.
Liberty may update Wall Street on its plans for Sirius on
its earnings conference call on Wednesday.
HIGHER REVS PER SUBSCRIBER
Its revenue per subscriber rose to $11.97 from $11.53 a year
ago, beating an estimate from Lazard Capital Market analyst
The company raised its prices for the first time at the
beginning of the year. Some analysts had worried Sirius was
discounting its products to keep subscribers.
"This will stand as a positive rebuttal to fears that the
price hike was being subverted by discounting," Crockett said in
a research note.
Sirius raised its 2012 target for adjusted earnings before
interest, taxes, depreciation and amortization (EBITDA) to $900
million from $875 million and kept its free cash flow
expectations at $700 million.
Gabelli & Co analyst Brett Harriss said he expects the
company to raise its annual earnings forecast even higher in
Excluding a $3 billion income tax benefit related to
previous net operating losses, the New York-based company
reported earnings of about $136 million, or 2 cents per share,
which matched analysts' estimates.
In July, Sirius said it added 622,042 net subscribers in the
second quarter, up 38 percent from a year ago. It now has 22.9
million subscribers and expects to add 1.6 million net
subscribers by the end of the year.
It also raised its subscriber and revenue targets last
month, fueled partly by strength in the auto industry, where
Sirius gets most of its customers.
Sirius XM shares rose 5 cents, or 2 percent, to $2.25 on