Today’s Market Observation From Schaeffer’s Investment Research features XM Satellite Radio. Market Observations are market-based reports that provide insight and analysis from a unique and unbiased perspective.
Turn the Radio Up, For That Sweet Sound … Of Earnings
XM Satellite Radio is the world’s leading provider of digital-quality satellite radio services. XMSR debuted its service in late 2001 and already boasts more than a million subscribers, each paying about $10 per month of service for over 100 channels of commercial-free music and talk. The company has initiated a deal with General Motors to offer its equipment and services in GM cars.
Analysts and investors will be tuning into XMSR tomorrow when it reports fourth-quarter earnings results. Wall Street currently expects the company to post a loss of $1.15 per share, which is effectively a 34-percent improvement over the firm’s year-ago per-share loss of $1.76.
For the third quarter, XMSR lost $1.12 per share, a nickel narrower than analysts’ expectations. Two of the past three earnings reports have resulted in positive surprises for XMSR.
Over the past 15 months, XMSR shares have increased in value nearly nineteen-fold. The stock last reached a new 52-week high in late December and has since been pulling slightly lower to digest some of its gains.
Currently, XMSR is in a precarious technical situation, sandwiched between its 10-week and 20-week moving averages. The stock has not traded below its 20-week in over a year, so any decline that causes XMSR to violate this trendline would be notable.
