Satellite Standard Group (SSG) an Inside Sirius Alliance partner, would like to point out what the expectations are, and what investors may want to watch for.
What The Street Is Expecting
The street is looking for a loss of 35 cents per share with revenue of $122,870,000.
What To Watch For
1. Watch for the reaction by the street to the size of the loss. Sirius announced that they were taking the full cost of the Howard Stern shares issued in January of this year in Q1. The value (cost) of those shares is about $220,000,000. The impact on the loss for one quarter is very big, and there may be some out there who are not expecting it despite the fact that this event is well known.
2. Watch for a lower Subscriber Acquisition Cost. One of the benefits of a big spill-over of subscribers fro Q4 into Q1 is that those subscribers SAC costs were already absorbed in Q4. This should help bring down the SAC number. However, you should also be aware that there were inventory crunches, and Sirius apparently did go "back to manufacture". This type of activity has costs associated with it. There were also rumors during the quarter that Sirius was flying over product to meet demand. While that did get product to stores more quickly, it is also a more expensive method of getting hardware stateside.
3. Watch for ramped up OEM's. This channel of Sirius' subscribers has seen substantial growth, and will continue to see growth. Sirius is anticipating about 826,000 NET OEM subscribers this year, so one might imagine that on average we should see a bit over 200,000 in each quarter.
4. Watch for improved advertising revenue. Mel Karmazin has stated that advertising revenue has been doing very well, but has not yet raised guidance from ad revenue being 10% of 2006 revenue. This call will offer the first taste of how well the ad revenue is doing. Investors should run a quick check on the numbers to see if Q1 ad revenue is better than 10% of overall revenue. In our opinion, if ad revenue is anything over 12.5% we may see Mel increase guidance in this area.
5. Watch For Strong Discussion about CFBE. Sirius has stated that they anticipate that they can be CFBE in Q4. Look for Mel to hone in on the metrics that illustrate this.
6. Watch for Discussion about the retail channel. Sirius captured 59% NPD share in Q1. Look for Mel to talk about this, and look for him to give the number with the inclusion of Wal Mart, Sams, and Costco. Look for Mel to speak about what consumers are doing when they have a choice.
7. Subscribers. Sirius has not yet announced the subscriber total for the 1st quarter. They will surely announce it in the call, and will show that they are well on their way to reaching their stated guidance of 6,000,000 subscribers by the end of the year. At this points most analysts feel that Sirius can indeed obtain that goal. Sirius does in fact have a distinct sector where they can grow even further. The Friends and family section of the Sirius subscriber base makes up about 11%. Rival XM is at about 20%, and has aggressively marketed to this section of the market. If Sirius were to decide to be aggressive in this sector, they could garner a good number of subscribers on top of what they are already projecting.
8. Hardware. Watch for Sirius to finally offer some more flavor on the new hardware. People know it's coming, but are in hopes that it comes in time for the Fathers Day sales push.
via Satellite Standard Group (SSG) an Inside Sirius Alliance partner