NEW YORK – Sirius Satellite Radio Inc. (SIRI), which added shock jock Howard Stern to its lineup in early January, reported Friday that its losses widened to $311.4 million in the final quarter of 2005 on higher costs for acquiring subscribers.
The loss was equivalent to 23 cents per share, a penny worse than analysts surveyed by Thomson Financial had been expecting. In the same period a year ago, Sirius lost $261.9 million or 21 cents per share.
Revenues more than tripled to $80 million in the fourth quarter from $25.2 million in the same quarter a year earlier.
Both Sirius and its larger rival XM Satellite Radio Holdings Inc. (XMSR) are spending heavily to expand their emerging businesses, which charge about $13 a month for dozens of channels of commercial-free music, as well as talk, news and sports.
Sirius reported Friday that its costs for acquiring new subscribers more than doubled to $145.2 million from $64.9 million in the same period a year ago. Its average cost for adding each subscriber, however, fell to $113 from $124 in the same period a year ago.
The New York-based Sirius said it added a total of 1.27 million subscribers in the fourth quarter, the leadup period before it added the hugely popular Stern to its lineup in early January.
During that time, rival XM spent heavily on marketing and promotion to counter the threat from Stern. XM surprised investors on Thursday with much higher marketing expenses and the sudden departure of one of its directors over concerns that the company was spending too much money.
Sirius's five-year contract with Stern was originally worth $500 million, but its value swelled to $600 million due to the appreciation of Sirius' shares. XM has also signed big-ticket programming deals, including a $650 million pact with Major League Baseball.
Sirius said it ended 2005 with 3.3 million subscribers, triple the level from a year ago of 1.1 million. Average monthly churn, or the amount of its subscriber base that it loses, was 1.5 percent, the same as a year ago.
On Thursday, XM said it had more than 5.9 million subscribers at the end of 2005 and said its total had risen to more than 6 million in the first week of January.
For the full year, Sirius lost $863 million or 65 cents per share, versus $712.2 million or 57 cents per share in 2004. Full-year revenues jumped to $242.2 million from $66.9 million.
Sirius' shares edged up 7 cents to $5.72 in pre-market trading.