Sirius XM Radio said Tuesday it ended 2010 with 20.19 million subscribers, a company record, allowing it to finish the year as the second-largest media subscription business behind cable giant Comcast.

Netflix, which is on a faster subscriber growth trajectory, ended 2010 with just slightly more than 20 million users, but is expected to handily outgrow Sirius XM. Netflix is expected to be well ahead by the time the companies report first-quarter results as the company itself predicted it would have as many as 22.8 million subscribers by the end of March.

Sirius XM reported 2010 net subscriber additions of 1,418,206, compared to a net subscriber loss in 2009 of 231,098.

Shares of the satellite radio firm fell Tuesday after its 2011 outlook was weaker than Wall Street was hoping, even though some analysts said management may simply be conservative early in the year. The stock closed down 7.7 percent at $1.69.

Fourth-quarter revenue at the satelite radio firm rose 9 percent to $736 million as the company added 328,789 net new subscribers in the closing quarter of 2010 to end the year above the 20.1 million customers it had targeted.

But Sirius XM swung to a fourth-quarter loss of $81 million from the year-ago profit of $12 million driven by costs for debt extinguishment and restructuring charges. Excluding those, the company would have posted a profit of $64 million, compared with a profit of $18 million in the year-ago period.

"Sirius XM's results in 2010 were exceptional, surpassing our guidance and achieving record revenues, adjusted [earnings before interest, depreciation, taxes and amortization] and free cash flow," said CEO Mel Karmazin. "Our unparalleled content and the continuing improvements in the economy helped us attain a record-high subscriber base of 20.2 million."

Sirius XM projected 2011 full-year revenue of approximately $3 billion, which would amount to growth of about 6.5 percent, and net new subscriber gains of 1.4 million.

"We think Sirius XM's guidance likely is based on conservative estimates of new vehicle sales and as it has done in the past, it will likely revisit guidance once visibility on new car sales trends improves," said Citadel Securities analyst Vijay Jayant.

Karmazin said the company's outlook is bright amid expected improvements in U.S. auto sales, upcoming product innovations and key programming and stars. "Our renewed contracts with Howard Stern and the NFL, as well as investments in exciting new content, ensure that our subscribers will continue to enjoy the unparalleled entertainment that has made Sirius XM the largest subscription radio company in the world," he said.

On an earnings conference call, Karmazin said that If there were any doubts about the company's viability, 2010 put them to rest, and Sirius XM is not seen as a long-shot anymore. "I believe the best days for Sirius XM are yet to come," he told analysts. "We fully expect to hit it out of the park in 2011."

He spent some time discussing the goal of establishing long-term customer loyalty. "We want to become a no-brainer" when consumers decide how to spend their money, he said.

Karmazin vowed to add channels, including offers that will attract Hispanics, introduce data services and an electronic programming guide and said Sirius XM customers will in the future be able to pause, resume and record, as well as buy music from their service.

Asked if Sirius XM could introduce an offer similar to that of online music and music recommendation service Pandora, Karmazin said consumers like curated channels, but nothing would preclude the company from adding such an offer if subscribers found it desirable.