Sirius XM Loses Its Beer Goggles

Sirius XM Radio (Nasdaq: SIRI) made its investors wait two days to discuss its fourth-quarter results. They will have to wait even longer if they want to know if the company is growing or shrinking.

Breaking from tradition, the satellite radio giant refused to provide guidance on its near-term subscriber targets. We're now shoulder-deep into the first quarter, do you really think that Sirius XM doesn't have a good read on how many -- or how few -- subscribers it will have by the end of the month?

Back in November, Sirius XM went out on a five-year limb. Now it's asking shareholders to throw away those 2009-2013 targets. The only metric it's keeping is its expectation to close out the year with more than $300 million in adjusted EBITDA.

Don't get me wrong. It's great to see Sirius XM stick to its operating cash flow gauge. However, since subscriber acquisition costs take a big bite out of that number, I don't think I like the implications of the company only providing its EBITDA metric.

Just say it, Sirius XM. You certainly won't be the only company to lose net subscribers this month. Mr. Market's giving everyone a mulligan. I'm not the only one who saw this coming, so just rip off the Band-Aid and come clean.

The company did have plenty of other things to say during the call:

• Sirius XM justifies the hefty 15% coupon on the bailout loan from Liberty Media (Nasdaq: LINTA), arguing that blue chips like General Electric (NYSE: GE) and Goldman Sachs (NYSE: GS) recently took handouts with chunky 10% interest rates. Maybe so, but those companies didn't also hand over 40% of the company, in addition to being on the hook for the principal being borrowed.
• It mentioned the liquidation of Circuit City as problematic -- twice -- but that actually should have been a positive. The store by me was practically giving away XM receivers for $7 apiece in its final weekend. That stinks for liquidators, but it should give Sirius XM a near-term boost in gross subscriber additions. Besides, Sirius XM has been weak at the retail level for a few quarters now.
• The company is trying to mine new channels for subscriptions. Beyond finally gearing up for an Apple (Nasdaq: AAPL) App Store release, Sirius XM is working with used car dealers, who will be financially motivated to get dormant receivers activated.
• The car market stinks, but Sirius XM is expanding deals with automakers like Toyota (NYSE: TM) to help improve its market penetration rate from an impressive 52% of new cars coming out with factory-installed receivers.

So if Sirius XM is so forthcoming about all of these developments, why is it suddenly so tight-lipped about a quarter that ends in just a couple of weeks?

I'm guessing it goes back to your mom's cardinal rule: If you have nothing nice to say, blame it on the lack of visibility.

Copyright © 2008 Universal Press Syndicate.