About 79,000 people signed up for XM Satellite Radio service in December, part of a holiday-season surge that contributed to a fourth-quarter revenue increase of more than 1,500 percent.
The company remained unprofitable, however, and its net loss for the quarter widened slightly.
D.C.-based XM Satellite Radio Holdings Inc. said the 145,605 subscribers added in the three months ended Dec. 31 made up more than 40 percent of the company's new subscriptions for 2002. Fourth-quarter revenue rose to $9 million, from $532,000 in the year-earlier period, but its net loss for the quarter grew to $155.9 million ($1.76 a share) from $144 million ($2.26).
During fiscal 2002, its first full year of product sales, XM's revenue rose to $20.2 million from $533,000, but the company lost $495 million ($5.95), up from a loss of $284.4 million ($5.13) in 2001.
A significant portion of the holiday sales came from a new portable device, called the Delphi XM SkyFi, that sells for about $200 and can connect XM's service to car and home stereos, said Hugh Panero, president and chief executive. Circuit City and Best Buy stores bought 100,000 SkyFi products in late 2002, and XM said yesterday that Wal-Mart stores throughout the nation will be selling the units by June.
In December, XM landed a $475 million financing deal, including a $250 million payment deferral and debt agreement with General Motors and an infusion of $225 million from American Honda Motor Co., Hughes Electronics Corp. and other investors. XM says the financing will carry it though late 2004, when it expects to break even. XM also laid off 80 employees, about 18 percent of its staff, during the fourth quarter.
Shares of XM jumped 14 percent Wednesday when independent research firm SkyWaves Research Associates said it expected XM to have between 490,000 and 500,000 subscribers by the end of the first quarter and 1.2 million subscribers by the end of 2003. SkyWaves, of Ann Arbor, Mich., predicted XM's competitor, Sirius Satellite Radio Inc., would have only 45,000 to 50,000 subscribers by the end of the first quarter.
Yesterday, XM stock rose 86 cents, to $6.77.