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XM Satellite Radio on Monday reported a narrower fourth-quarter loss as it prepared for Congressional hearings concerning its proposed merger with rival Sirius.
For the quarter, XM lost $263.1m, or 90 cents per share, compared with $270.4m, or $1.22, during the same period a year ago. The company, which has never made a profit, benefited from a reduction in costs, and from a jump in subscriptions that helped push revenues up 45 per cent to $257m.
The results came a week after XM announced an $11.4bn merger with Sirius. Analysts and investors have projected $5bn in cost savings that would push the companies toward profitability.
However, the biggest obstacle to the deal will be allaying antitrust concerns at the Justice Department and the Federal Communications Commission. At a Congressional hearing on Wednesday, the companies are expected to argue that they are part of an expanding market for portable audio that includes iPods, mobile phones and other devices.
“We’re working to close the deal and we’re confident it’s going to go through,” Hugh Panero, XM’s chief executive, said on Monday.
XM suffered last year because of product delays and increased competition from Sirius, which spent heavily to lure top talent such as Howard Stern, the radio shock jock. It finished the year with 7.6m subscribers – up 1.6m over the previous year but shy of the 9m it had forecast.
One bright spot was that XM managed to lower its average cost of acquiring new subscribers in 2006 – to $126 from $141 the previous year.
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