August Auto Sales Should Boost Sirius XM Subscriber

Satwaves
By Brandon Matthews

By Brandon Matthews

The august sales data is in, and one real winner will no doubt be Sirius XM Radio (SIRI). The numbers simply do not lie. The market chooses to focus on year over year numbers when it comes to U.S. auto sales, but for Satellite Radio investors the incremental increases in month to month sales have never been so important, as the subscriber breakeven point seems to hover near the current rate of auto sales. The combined numbers put auto sales on a pace this quarter to exceed 3 million units.

There are two important factors to look at when it comes to Satellite Radio subscriber additions and losses. The first is auto sales data and the second is jobs data. Higher auto sales equates to more promotional subscribers while high job losses equates to higher churn, as more people decide to put their paid satellite radio subscriptions on hold. There is an unknown point in which the two factors can cancel each other out, resulting in zero subscriber growth.

For those that paid attention to the company’s second quarter conference call, Sirius XM Radio C.E.O. Mel Karmazin tipped his hand when he announced that the company had seen positive subscriber growth during the Month of July. The August auto sales data would seem to indicate that the same holds true for August, as sales far outpaced those in the first month of the quarter. Read more…


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