Sirius XM reports 14% gain in subscribers
Sirius XM Radio Inc. reported a 14 percent increase in subscribers in the second quarter, citing higher new-vehicle sales.
Sirius XM's net income, boosted by a $3 billion income tax benefit — was $3.1 billion in the quarter compared to $173 million in the year-earlier period.
Revenue rose 13 percent to $837.5 million.
The company added about 622,000 subscribers during the quarter, sending the subscriber count to 22.9 million. In the first half of 2012, 1.02 million people signed on to the satellite radio provider.
Sirius XM CEO Mel Karmazin said approximately two-thirds of all new vehicles sold in the United States today come with a satellite radio and a trial to Sirius because of long-term agreements with automakers.
Karmazin also said he was pleased with the company's growth in the used-vehicle market.
"While we're coming up with ways to further improve our performance in used cars, we are benefitting from what is largely a numbers game. Cars turning over today in the second-owner market are increasingly likely to have a satellite radio as our new-car penetration rate began to increase materially five or six years ago," he said.
While the subscriber count increased, the rate of people becoming paid subscribers after their trials ends remained steady.
The new vehicle consumer conversion rate was 45 percent for the quarter, unchanged from the year-earlier period, said CFO David Frear.
Karmazin said the company has conservative auto-sales expectations for the second half of the year as the economy shows signs of "tepid growth."
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