NEW YORK -- The No. 2 U.S. satellite radio company, Sirius Satellite Radio Inc., on Wednesday posted a smaller third-quarter loss but signed on fewer new customers than expected and cut its 2003 targets.
The provider of advertising-free music channels and sports, news and talk shows also said costs rose due to payments for components but one analyst believed this news was partly offset by commitments from automaker DaimlerChrysler AG.
"There was incremental positive news ... despite the shortfall," said Janco Partners analyst April Horace, noting the automaker's decision to give 2004 Dodge Durango dealers the option of having Sirius radios installed in the factory.
But Horace was disappointed Sirius signed up 15,000 fewer customers than she expected and cut its 2003 forecasts to more than 200,000 total subscribers at year-end, from its earlier target of 300,000 new customers, excluding customer turnover.
Sirius, which trails market leader XM Satellite Radio Holdings Inc. , also missed at least two more analyst estimates for the third quarter with its roughly 44,000 new subscribers in the period, bringing its total to 149,612.
XM said this week it has more than 1 million customers and still expects 1.2 million subscribers by the end of the year.
Sirius Chief Financial Officer David Frear told Reuters in a telephone interview the company changed the target because it had no reference point for its first holiday retail season.
"It's kind of difficult to get clear ... we honestly don't know how high is up for the holiday season," Frear said.
Sirius posted a loss of $106.7 million, or 11 cents a share, versus a loss of $119.7 million, or $1.56 a share, in the year-ago quarter. Its shares outstanding increased to 998.2 million in the 2003 quarter from 76.9 million a year earlier.
Revenue rose to $4.3 million from $17,000 a year earlier.
Frear said Sirius' $522 per subscriber cost for new customers was higher than expected as the company had to pay subsidies on radio chips that supplier Agere Systems Inc. shipped ahead of demand due to an earlier contract.
"(Customer) acquisition costs will be lower in future quarters," said Frear, without giving specifics.
Horace at Janco had estimated costs of $325 per subscriber, while other analysts had even lower targets.