Sirius XM Radio Inc (SIRI) Q3 Earnings Preview: Citi – ValueWalk Premium
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Sirius XM Radio Inc (SIRI) Q3 Earnings Preview: Citi

Sirius XM Radio Inc (SIRI) Q3 Earnings Preview: Citi

Sirius XM Radio Inc (NASDAQ:SIRI) will announce its Q3 earnings results on Thursday, the 1st of November, before the market opens, with the conference call scheduled at around 8.00 a.m EST. The satellite radio services company provides sports, music, and News media, among others, to its over 2 million subscribers.

It is the largest satellite radio services provider in North America. The company was recently acquired by Liberty Media Corp (Capital) (NASDAQ:LMCA), and consequently announced that the current CEO Mel Karmazin will be leaving the company early next year.

Citi Equity research analyst, Jason B Bazinet, released a report on SIRI, with optimistic expectations well above consensus estimates.

Sirius XM Radio Inc (SIRI) Q3 Earnings Preview: Citi

Bazinet expects the company to report EPS of $0.03 per share for Q3, while revenue is expected at $873 million, representing a 14.1 percent increase from last year. This is above the consensus estimate of $866 million, or 13.2 percent growth from last year. However, adjusted EBITDA is slightly below the consensus estimate, at $243 million, as compared to $255 million reported by Thomson Reuters' First Call.

The analyst also notes, “during the 2Q12 conference call, management expects to realize a $112 million tax benefit in 2H12, due to a reversal of Sirius XM Radio Inc (NASDAQ:SIRI)’ deferred tax allowance”.

The satellite radio company is also expected to post solid, free cash flows, with Citi's equity research unit projecting $190 million in cash for the quarter, as compared to $75 million reported in 3Q11.

Sirius XM Radio Inc (NASDAQ:SIRI) is reportedly in search of a CEO, as it expects Karmazin to leave in February 2013, while John Malone's Liberty Media Corp (Capital) (NASDAQ:LMCA) takes over. Malone rescued the company from near bankruptcy a few years ago, and the analyst expects a commentary on CEO search, during the earnings announcement.

Additionally, the analyst points the return on capital and the use of cash as another topic to watch out for, as well as guidance updates for the full year 2012. The analyst estimates revenue guidance of about $3.4 billion, while adjusted EBITDA is estimated at $900 million.

Free cash flows are projected at $700 million, while full year 2012 EPS is projected at $0.57, as compared to a consensus estimate of $0.55 per share. The analyst also expects a commentary for the certified pre-owned car market. At the time of this writing, Sirius XM Radio Inc (NASDAQ:SIRI) was trading at $2.83 per share, up $0.01, or a 0.18% increase from last week's close.



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