Satellite Radio Shows Strong Growth

Both Sirius and XM this week reported strong results through the first three months of 2005, further proving that the nascent satellite radio business is taking hold among consumers. Both companies hope to continue to move toward profitability during the year.

Sirius Thursday reported it had added 305,437 subscribers during the quarter, a 237 percent increase over the year ago quarter. While the company was adding subscribers, however, its net loss widened from $144 million in the year ago quarter to $193 million this quarter.

Sirius also warned that it was raising its adjusted loss from operations to $510 million for the year, even though it was increasing expected subscriber additions to 1.6 million with lower customer churn.

XM reported earnings on Wednesday and it appeared at first look as if the larger of the two companies was doing much better financially. XM added 541,140 subscribers during the quarter, a 68 percent increase over last year's numbers. The company's net loss narrowed to $119 million from $170 million in 2004.

Looking deeper into XM's books, the company showed that it was able to acquire customers at a much lower cost than its competitor, coming in at $90 per customer versus $190 for Sirius. This was down from $106 for XM and $248 for Sirius in first quarter of 2004.