Sirius XM Shares Sell Off Following Weak Subscriber Data

When Sirius XM Holdings (NASDAQ:SIRI) released its third-quarter results last week, it was easy to see all the records. One only had to look at the bullet points at the top of the press release:

  • Third Quarter Revenue Climbs 8% to $1.4 Billion
  • Quarterly Net Income Increases 42% to $276 Million; Diluted EPS Grows 49% to $0.06
  • Adjusted EBITDA Grows 12% to a Quarterly Record of $551 Million and Margin of 39.9%
  • Quarterly Operating Cash Flow Rises 24% to $521 Million
  • Free Cash Flow Grows 22% to a Quarterly Record $434 Million
  • Self-Pay Net Subscribers Increase 311,000 to Reach Approximately 27 Million

Many of the records were expected, especially new highs in revenue, total subscribers and self-pay subscribers. What may not have been expected was the low level of growth in total subscribers, which grew by just 119,000. That was the smallest increase since the fourth quarter of 2013 and may help explain why the shares are trading almost 4% below the level reached the day before earnings were released.

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