A Good Year Expected for Sirius (NASDAQ:SIRI)

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By Ross Schwartz on October 29, 2014 Company

Sirius XM Holding Inc (NASDAQ:SIRI), is an American broadcasting company, which deals in satellite radio services in United States that include Sirius (NASDAQ: SIRI) Satellite Radio and XM Satellite Radio. Last Monday, Sirius (NASDAQ: SIRI) announced its third quarter performance results at $0.02 earnings per share and a $1.057 billion in revenue. These figures stood close to the Thomson Reuters consensus of $0.02 earnings per share and a revenue figure of $1.04 billion. In comparison to last year for the same quarter, the earnings per share were at $0.01 and revenue rounded up to $961.51 million.

These results helped the company come up with an estimated guidance for the full year of 2014. The company expects a whopping figure of $4.15 billion in revenue, with a 1.25 million increase in number of self-pay subscribers and 1.5 million of total net subscribers. The expected revenue is at $4.15 billion with $0.08 earnings per share.

The company has arrived at these estimates thorough evaluation of their current quarter, in comparison to last year quarter of the same time period. Its net income for this year is up by 117% to $136 million in this quarter, whereas it was $63 million last year. Net subscribers in the third quarter rose up by 5% to 423,817. Self-pay net subscribers also rose by 7% to 379,598 in the quarter.

According to David Frear, CFO of Sirius (NASDAQ: SIRI), share repurchase for the year is expected to be almost $2.1 billion. The amount is at least 2.5 times higher than the $825 million produced in cash flow in the first 9 months for the current financial year. He further emphasizes that the figures for the year are expected to round off nicely, leaving enough capacity for capital returns and to implement strategic opportunities. This set’s next year’s expectations a little higher than the current year.

Another official announcement by Jim Meyer, the CEO of Sirius (NASDAQ: SIRI) came out, in which he stated how pleased he and his team members are with the Company’s performance for this quarter. Similar results, if not better are expected in the fourth quarter as well. He further highlighted impressive figures of the quarter which included an addition of 1.2 million subscribers, a 5 percent raise in EBITDA margins and a 32% increase in free cash flow.

Jessica Cohen of Merrill Lynch, gave a buy rating of $5 price objective, which is the highest till date given by any analyst. Without disclosing her reasons for this rating, she only slightly pointed towards the raise in new and used auto sales.

On Monday, the shares fell by 0.6% to $3.35. But once the earnings report surfaced on Tuesday, the market reacted positively and shares rose slightly to $3.37. The estimated market consensus is of $4.28 price target. The 52 week trading is expected to be from $2.98 to $3.89. Sirius (NASDAQ: SIRI)’s market cap is of $19 billion. The company revenues are remarkable for the current quarter, and its future performance is expected to be equally good.