Continued growth in subscribers helped XM Satellite Radio Holdings slightly reduce its losses in the last quarter of 2006 from the fourth quarter of 2005, the company said yesterday.
XM, which broadcasts from the District, hopes to merge with rival Sirius Satellite Radio, which is based in New York. Both companies will continue to operate separately as they await regulatory approval from the Federal Communications Commission and Department of Justice, which is expected to take several months.
XM's last-quarter revenue increased by 45 percent, to $257.1 million from $177.1 million in the fourth quarter of 2005. The company narrowed its loss to $263.2 million (90 cents a share) from $270.5 million ($1.22).
XM finished the year with 7.6 million subscribers, a 29 percent increase over the year before, that was, however, lower than the projections the company made in early 2006. Executives said they hoped to have at least 9 million subscribers, who typically pay $12.95 a month, by the end of this year.
XM reduced its quarterly marketing expenses by more than 25 percent, spending $142 million compared with $196 million, company executives said in a conference call with analysts and reporters. The cost of gaining each new subscriber fell from $141 to $128.
In the last quarter of 2006, XM took a charge of $57.6 million to reflect the reduced value of its stake in a Canadian satellite radio affiliate.
For all of 2006, XM lost $732 million, or $2.70 per share. In 2005, it lost $675 million. XM and Sirius have paid heavily to recruit such stars as Howard Stern, Oprah Winfrey and Martha Stewart. They contend they need to merge to remain competitive with over-the-air, commercial radio, iPods and other audio services, but some consumer groups oppose monopoly ownership of satellite radio.