Liberty Media CEO: Sirius Is At A Bottom
August 07 2009 - 12:40PM
Dow Jones News
Greg Maffei, chief executive of Liberty Media Corp., said Friday
that Sirius XM Radio Inc. (SIRI) has hit bottom and is poised for a
rebound.
"You'd be hard-pressed to find a media company out there that is
growing at the rate [Sirius] is growing," Maffei said on a
conference call with analysts following Liberty's second-quarter
earnings release.
Liberty lent Sirius $530 million for a 40% stake in February as
satellite radio company run by Mel Karmazin was teetering on the
brink of bankruptcy. Sirius has suffered under the weight of a
heavy debt load left over from the merger between Sirius and XM,
which closed last fall.
Sirius reported Thursday that its second-quarter loss widened as
the satellite-radio company reported $132 million in charges, while
its subscriber count slipped and churn rose slightly in a sign of
economic weakness, particularly in the auto business where the
company gains the majority of its new subscribers.
Its revenue more than doubled to $590.8 million, but factoring
out the effects of the merger, the company's revenue grew 1.1%.
On a show of confidence, Sirius boosted its outlook to $400
million in adjusted income from operations this year, up from a May
forecast of $350 million.
"We're convinced [the company has hit bottom]," Maffei said.
"The [second-quarter] results seem to demonstrate that."
He said that while bankruptcy seemed like a possibility for
Sirius in February, such talk is now a distant memory for the
company.
"We're talking now about how much this equity is worth," Maffei
said. "I think this is a great business."
-By Nat Worden, Dow Jones Newswires; (212) 416-2472;
nat.worden@dowjones.com