NEW YORK - Sirius XM Radio said it has earmarked more merger-related cost savings than previously expected.
But the subscriber growth outlook fell short of an analyst's estimate and the stock fell more than 6 percent.
Sirius, whose acquisition of rival XM was completed in July after 17 months of scrutiny by regulators, said it sees cost savings of $425 million, up from its previous estimate of $400 million.
“We are taking cost out of the organization every single day," Sirius XM chief executive Mel Karmazin said at a Merrill Lynch conference that was broadcast on the Internet.
Most costs will come from cutting loose executives, rethinking marketing spending and consolidating sales and programming operations.
The company expects to end 2008 with about 19.5 million subscribers, and it sees about 21.5 million subscribers by the end of 2009.
Janco Partners analyst April Horace expected their combined subscribers to be about 23 million in 2009, up from the 18.5 it reported when the merger was completed. Sirius shares slipped to a historical low of $1.15 on Nasdaq in midday trade.
As a result of the subscriber growth, Sirius sees pro forma revenue of about $2.4 billion in 2008, with 2009 revenue at $2.7 billion.
Sirius also said it plans to start offering a programming from the opposing services on October 6. For example, current XM subscribers can pay about $17 a months—a $4 premium to their typical rate—to hear Howard Stern's shows on their radios. (Reporting by Franklin Paul; Editing by Derek Caney)
But the subscriber growth outlook fell short of an analyst's estimate and the stock fell more than 6 percent.
Sirius, whose acquisition of rival XM was completed in July after 17 months of scrutiny by regulators, said it sees cost savings of $425 million, up from its previous estimate of $400 million.
“We are taking cost out of the organization every single day," Sirius XM chief executive Mel Karmazin said at a Merrill Lynch conference that was broadcast on the Internet.
Most costs will come from cutting loose executives, rethinking marketing spending and consolidating sales and programming operations.
The company expects to end 2008 with about 19.5 million subscribers, and it sees about 21.5 million subscribers by the end of 2009.
Janco Partners analyst April Horace expected their combined subscribers to be about 23 million in 2009, up from the 18.5 it reported when the merger was completed. Sirius shares slipped to a historical low of $1.15 on Nasdaq in midday trade.
As a result of the subscriber growth, Sirius sees pro forma revenue of about $2.4 billion in 2008, with 2009 revenue at $2.7 billion.
Sirius also said it plans to start offering a programming from the opposing services on October 6. For example, current XM subscribers can pay about $17 a months—a $4 premium to their typical rate—to hear Howard Stern's shows on their radios. (Reporting by Franklin Paul; Editing by Derek Caney)
