XM Loss Deepens Despite Subscriber Growth

XM, which is seeking regulatory approval for an acquisition by rival Sirius, said it lost US$129.3 million, or 42 cents per share, compared with $122.4 million, or 40 cents per share, a year ago.

Analysts expected the loss to narrow to 39 cents per share, according to Thomson Financial.

More Subscribers

Washington-based XM says revenue rose 17 percent to $308 million from $264 million last year, but that falls short of the $313 million expected by Wall Street.

The company finished March with 9.33 million subscribers, up from 7.9 million a year earlier. XM added a nearly identical number of subscribers -- about 1.4 million -- in the 12 months from April 2006 to March 2007.

The cost to acquire a new customer jumped to $73 from $65 a year ago.

Sirius most recently reported a subscriber base of 8.3 million. While smaller, Sirius has been growing at a faster rate than XM.

Nearly all of XM's subscriber growth now comes from factory-installed automobile radios, as opposed to radios purchased separately by the consumer.

Still Needs FCC Approval

In the last 12 months, the factory-installed subscriber base increased 36 percent to 3.9 million, while the retail market increased just 1 percent to 4.5 million. The rest of the subscriber base comes from smaller categories like subscriptions held by rental-car companies.

In March, the Justice Department approved the acquisition by Sirius, but it still needs approval by the Federal Communications Commission . The companies had hoped to have the deal completed by the end of 2007.

The first quarter 2008 losses includes $3.5 million of merger related expenses, compared with $9.2 million in the year-ago quarter, XM said.

XM shares rose 19 cents to $11.99.