XM, Sirius Both Cut Losses

Both XM and Sirius reported their full fourth calendar quarter results this week, showing that while both companies were making progress at narrowing losses, true profitability is still a long ways away.

XM was first to report on Monday, and said that it had accumulated a loss of $256.7 million on revenues of $257.1 million, up 45 percent over last year. The company ended the year with just over 7.6 million subscribers, adding 442,679 subscribers in the fourth quarter.

Sirius' numbers were not much better: that company reported a loss of $245.6 million on revenues of $193.4 million, more than double the amount it reported in 2005. The company ended the year with 6.02 million customers, adding 905,247 in the holiday quarter.

For 2007, Sirius expects to end the year with about 8 million customers, while XM projects that it would add about one and a half million new subscribers to end the year with 8.9 to 9.2 million customers.

While the road to regulatory approval for the planned merger between the two satellite radio providers would be tough, both companies are pointing to about $5 to $6 billion in cost savings as a result of the marriage.

The cost-cutting would help a combined entity reach true profitability much quicker than separate entities would alone, they argue.