XM, Sirius Progress Towards Profitability

As the companies continue to work towards getting their proposed merger approved, both show progress in improving their balance sheets. Sirius shows the most improvement, capturing a 66 percent subscriber share.

Both companies expressed confidence in the eventual merger of the two companies, saying the retail market had changed dramatically since the companies were first granted their licenses ten years ago.

"We believe the merger makes sense for consumers and stockholders and we are confident that the transaction will be completed by the end of 2007," Sirius CEO Mel Karmazin said in a statement Tuesday.

Karmazin's company ended the quarter with 6,581,045 subscribers, up 61 percent from last year and adding 556,490 new subscribers. XM's results, reported last Thursday, weren't as spectacular: it added 285,000 new subscribers to finish the quarter with more than 7.9 million, down 50 percent from last year.

Revenue between the two companies was just about equal, with XM pulling in $264 million, up 27 percent, and Sirius $206 million, up 61 percent. Though again, Sirius showed vast improvement here, shrinking its loss 68 percent to $144.7 million, while XM's loss stood at $122 million, down 18 percent.

XM argued that while its retail sales were soft, data from research firm NPD indicated that there was some sequential improvement. It reiterated its year-end target of 9.0 to 9.2 million, while saying it expected its financial situation to continue to improve.

Sirius reiterated its own year-end guidance, saying it should surpass 8 million subscribers by year's end. It also urged investors and security holders of either company to read a joint proxy statement/prospectus when filed, as it "will contain important information about the proposed transaction."