Net loss $229 million, $147 million a year ago.
XM Satellite Radio posted an expanded second quarter net loss, fueled, in part, by over $100 million in non-operating charges stemming from a debt restructuring. The company, which currently claims 7 million subscribers, also slashed its 2006 subscriber forecast for a second time this year.
For the three months ended June 30, XM's net loss widened to $229 million from a net loss of $147 million a year ago. Revenues grew 82% year-over-year to $228 million.
The company added 398,000 subscribers during the quarter, bringing its total at the end of June to 6.89 million subscribers – a 56% increase from a year ago. However customer acquisition costs increased to $64 per subscriber vs. $50 per subscriber in the second quarter of last year.
Additionally, XM dropped its total 2006 subscriber estimate to a range of 8.2 million to 7.7 million customers, blaming a weak retail environment and “regulatory uncertainties concerning 'plug-and-play' radios.” The satcaster initially was calling for 9 million subscribers by the end of 2006. In May it lowered its guidance to 8.5 million.
In May XM suspended shipments of its Delphi XM SKYFi2 and Audiovox Xpress radios, following FCC concerns about transmitters in the units. The models use small FM transmitters that allow users to listen to XM's service through standard radios by tuning to an unused frequency on the FM dial. However they apparently do not meet federal emission limits. The company is retooling its radios to comply with the agency's emission limits.
Hard charging rival Sirius Satellite Radio on July 6 reported 4.7 million subscribers. It is forecasting 6.2 million subscribers by year’s end.