Sirius XM (SIRI) Q4 Earnings Meet & Rise Y/Y, View Intact

Sirius XM Holdings Inc. (NASDAQ:SIRI) reported fourth-quarter 2017 financial numbers wherein the top line beat the Zacks Consensus Estimate while the bottom line was in line with the same.

Earnings per share (excluding 6 cents from non-recurring items) of 5 cents met the Zacks Consensus Estimate. However, the metric rallied 25% from the year-ago figure.

Total revenues of $1,403.9 million, climbed 7.7% year over year and also outpaced the Zacks Consensus Estimate of $1,395.4 million. The revenues beat pleased investors. As a result, the stock gained 2.7% at the close of trading session on Jan 31.

Quarterly total operating expenses were $1,007.19 million, up 3.5% year over year. Sirius XM posted record fourth-quarter adjusted EBITDA growth of 14% year over year to $542 million. The company’s average revenues per user increased 2.1% year over year to $13.43 in the fourth quarter.

At the end of the fourth quarter, Sirius XM had $541.83 million of cash from operations compared with $503.13 million in the year-ago quarter. Quarterly free cash flow was $460.32 million compared with $429.42 million in the prior-year quarter.

At the end of the quarter under review, Sirius XM had nearly $69.02 million of cash and cash equivalents and $6,741.24 million of long-term debt compared with $213.94 million and $5,842.76 million, respectively, at the end of 2016. During 2017, the company repurchased 271 million shares for $1.4 billion.

Sirius XM Holdings Inc. Price, Consensus and EPS Surprise

Sirius XM Holdings Inc. Price, Consensus and EPS Surprise | Sirius XM Holdings Inc. Quote

Segment Wise Results

Quarterly subscriber revenues totaled $1,147.23 million compared with $1,084.14 million in the prior-year quarter. Advertising revenues were $42.69 million compared with $38.9 million a year ago. Equipment revenues were $39.92 million compared with $32.66 million in the year-earlier quarter. Other revenues grossed $174.06 million in the reported quarter compared with $147.29 million in the fourth quarter of 2016.

Subscriber Statistics

In the fourth quarter, Sirius XM added 569,000 net new subscribers. As a result, the total subscriber tally as of Dec 31, 2017 was up 4% year over year to 32.74 million.

Payment category wise, Self-Pay subscriber count grew 6% year over year as of Dec 31, 2017 while Paid Promotional customer count was down 3% year over year.

2018 Guidance

The company’s expectations for net subscribers, revenues, adjusted EBITDA and free cash flow in 2018 remain unchanged. It anticipates approximately 1 million self-pay net subscriber additions in 2018 while revenues of approximately $5.7 billion are predicted in the period. Adjusted EBITDA in the current year is estimated at $2.15 billion whereas free cash flow is projected at nearly $1.5 billion in 2018.

Zacks Rank & Key Picks

Sirius XM carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Entercom Communications Corporation (NYSE:ETM) , Nexstar Broadcasting Group, Inc. (NASDAQ:NXST) and Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Entercom Communications, Nexstar Broadcasting Group and Sinclair Broadcast Group have gained more than 12%, 15% and 6%, respectively, in the last six months.

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