Sirius XM said Thursday that it is developing an application so its satellite radio service will be streamed to Apple's iPhone and iPod touch. The company said it expects to launch the application in the second quarter.
Sirius XM executives--CFO David Frear, CEO Mel Karmazin and operations and sales chief Jim Meyer--all mentioned the iPhone launch on the company's earnings conference call, which recapped Sirius' fourth quarter results. Frear added that Sirius XM's goal was to make its content available outside beyond its satellite signals. The company on Tuesday reported a fourth quarter net loss of $245.8 million, or 8 cents a share, on revenue of $644 million. Adjusted operating income was $31.8 million. Sirius XM said that its brush with bankruptcy is behind it and 2009 will be about cost cutting and preparing for future growth---at some point.
The iPhone application is notable because it's conceivable that one day Sirius XM will be delivered mostly via non-satellite signals. As a customer, I'm hoping the iPhone application is just the beginning--bring the service to the BlackBerry, Android and Windows Mobile too. Overall, Sirius XM is a content company not a technology outfit.
Among the takeaways from the call:
- Sirius said its Mirge radio player, which gets Sirius and XM signals is available today.
- Executives said a recent transaction with Liberty Media, which acquired a 40 percent stake in Sirius XM for $530 million, puts its debt issues behind it for 2009.
- Sirius XM stopped giving subscriber and revenue guidance because it's impossible to predict sales given the auto industry's problem and the broader economic downturn. All previous forecasts on subscribers and revenue are pulled. However, Siriux XM said it will deliver more than $300 million in 2009 EBITDA.
- CEO Mel Karmazin commented on its investment from Liberty Media, which saved the company from bankruptcy. Karmazin said that the rate---roughly 15 percent--- Sirius XM paid was fair given the debt market and the Liberty financing "was a much better outcome" than the alternatives.
- Karmazin added that 2009 will be a terrible year for auto sales and churn will increase. Karmazin said merger synergies and better cost management will get the company through the short term. But if auto sales pick up from 9 million units to 10 million units "the company will benefit substantially."
- The Circuit City bankruptcy hurt Sirius XM demand, said executives since the now-dead retailer was a big sales channel for satellite radio.
Shares closed up 22 percent to 19.5 cents Tuesday.