Thursday, December 30, 2010

BMW offer one-year subscription of the "Sirius Everything" package with every new model year 2011 BMW Mini

Sirius XM shares are spiking to a new 52-week high today after said the number of new car sales in the U.S. will reach the highest level of the year this December.

Yesterday the satellite radio company announced it has teamed up with BMW to offer an introductory one-year subscription of the "Sirius Everything" package with every new model year 2011 BMW Mini and several of its new motorcycle models.

Sirius investors are bullish on the partnership news as the auto market is expected to boom.

Edmunds expects to see about 1.1 million new auto sales in December, up 30.4% from November 2010 and up 10.2% from December 2009. The car-buying site projects a 10.5% increase in total units sold in 2010 to 11.5 million from 10.4 million in 2009.

A few weeks ago, Stern announced he had finally signed a new 5-year contract with the satellite radio company, ending months of speculation regarding his plans. His announcement came less than one month before his original 5-year, $500 million deal was due to expire.

Joyce currently rates Sirius as neutral with a price target of $1.60, and contrary to most analysts, Joyce said he would "not chase the stock" just because Stern is staying.

While the retention of this talent will "salvage" Sirius' subscriber growth, Joyce believes it isn't enough to move the stock much higher than $1.60.

Sirius stock is up more than 145% over the past year. Shares spiked to a new 52-week high of $1.69 this morning and are currently up more than 3% in Thursday trading to $1.65.

Wednesday, December 22, 2010

XM Satellite Radio on Chevy Camaro

A shark fin antenna on the 2011 Camaro Convertible's deck lid transmits XM Satellite Radio, OnStar and cellular signals, but the AM/FM antenna is hidden inside the spoiler.

The 2011 Chevy Camaro Convertible boasts new AM/FM antenna technology, thanks to its fans and one ham radio operator.

Fans spoke out after leaked photos of the new Camaro revealed an AM/FM whip antenna on the rear deck lid.

Chevy turned to ham radio operator and antenna expert Don Hibbard to help redesign the car's antenna. Hibbard and colleague Gregg Kittinger were challenged to conceal the AM/FM antenna without sacrificing radio reception.

We weren't sure that it would be possible," said Kittinger. "Typically antennas are hidden in a vehicle's rear window, but with a retractable soft-top roof, that's not an option."

The result was an innovative way to build put the antenna inside the rear spoiler.

Where other automakers have tried and failed, Chevy succeeded," said Hibbard. "We hope to take what we've learned with the Camaro Convertible, build on it and apply it to future vehicles. Hibbard talks about the unorthodox placement of the antenna and the number of technical challenges it presented in the video below.

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Thursday, December 16, 2010

SIRIUS XM satellite service provider

Satellite radio service provider SIRIUS XM Radio Inc. (SIRI - Analyst Report) received a shot in the arm as Standard & Poor's (S&P) upgraded its credit rating from "B+" to "BB-". S&P declared that improved operating performance and declining debt leverage of SIRIUX XM are the primary reasons for this upgrade.

Overall, the S&P rating outlook for SIRIUS XM is stable. Recently, the company achieved a milestone, touching the 20 million subscriber base, which is a historic high. SIRIUS XM is now steadily moving toward stability, following the bankruptcy it was facing just a year ago.

During the third quarter of 2010, SIRIUS XM reported a significant improvement with respect to several operating metrics. Average revenue per user was $11.81 compared to $10.09 in the year-ago quarter. Conversion rate was 48.1% compared to 46.2% in the year-ago quarter.

At the end of the third quarter, the company's debt leverage was 9.9x compared to a massive 29.5x at the end of fiscal 2009. Debt-to-capitalization ratio was 0.91 compared to 0.97 at the end of fiscal 2009.

SIRIUS XM's business depends to a large extent upon automakers. The sale and lease of vehicles equipped with satellite radios is the most important source of revenues for both XM and SIRIUS satellite radio services. Improving U.S. economic conditions that resulted in the recovery of auto sector sales together with better-than-expected consumer spending enabled the company to vastly improve results.

SIRIUS XM owns an extensive satellite network covering the whole of the U.S. that provides audio content streamed over 130 channels. After Comcast Corp. (CMCSA - Analyst Report), the company is the second-largest entertainment subscription service provider in the U.S.

SIRIUS XM declared that despite facing severe economic turmoil and competitive pressure, it acquired the last 10 million subscribers faster than the first 10 million. The company now expects to add 1.3 million net subscribers in 2010, much higher than its previous prediction of 1.1 million. Importantly, this is the fourth time that management has raised its subscriber guidance for 2010. Management is hopeful that its year-end 2010 subscriber base will touch 20.1 million.

On December 9, SIRIUS XM announced that the company entered into a new 5-year agreement with its star performer Howard Stern who hosts a talk-show in SIRIUS XM. Many analysts consider the performance of Howard Stern as one of the main reasons for the company's gradual recovery in last couple years. Stern's existing contract size is $500 million for 5 years that will come to an end by end 2010. However, the company did not disclosed the financial terms of the new contract.

SIRIUS XM competes with other broadcast radio companies such as Cumulus Media Inc. (CMLS - Analyst Report) and Westwood One Inc. (WWON - Snapshot Report). We maintain our long-term Neutral recommendation for SIRIUS XM.

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