5 Things Sirius XM's Management Wants You to Know

By Rick MunarrizFool.com

Source: SiriusXM.

Satellite radio is rocking and rolling these days, andSirius XM Radio is still simmering after another hot quarterly report. Last week's second quarter results were solid, and the company followed up the financials with a well-received conference call.

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With steady and profitable growth making Sirius XM a market darling, the shares are now approaching an eight-year high. Let's go over a few of the more interesting nuggets said during the earnings call.

1.8 Million net additions and counting

Sirius XM investors should be used to lowball guidance. Sirius XM has a habit of kicking off the year with a conservative outlook that it can revise as the year plays out. Its year-end target for net additions has gone from 1.2 million to 1.6 million to now 1.8 million with every passing quarterly report.

Things should continue to get better. As Sirius XM points out, 4.8 million car buyers started new trial subscriptions during the quarter with a record 8.2 million drivers kicking the tires now. Even with conversion rates slipping Sirius XM should continue to make it up in volume.

Music still makes the satellite go round

A growing subscriber base makes it easy to pay up for compelling content, and Sirius XM got that this past quarter with broadcasting performances from Coachella, Bonnaroo, and even the Grateful Dead farewell tour. It also hosted exclusive concerts with Pitbull and James Taylor, each performance in promotion of a channel launch.

More than just radio

Sirius XM has been making a push into telematics and other platforms that have nothing to do with its flagship satellite radio service. It may not be evident right now. It will take time. Sirius XM did launch NissanConnect Services powered by SiriusXM during the quarter, giving drivers the ability to lean on it for safety, security, and convenience services that most don't associate with the media giant.

The connected vehicle business won't end here. Sirius XM expects to announce new enhanced deals in the coming months.

Eating its own cooking

There's no denying that Sirius XM has a lot of shares outstanding. It has kept profitability back on a per-share basis. It has made the most of its perpetually improving free cash flow to eat away at that balance, buying back 1.5 billion shares along the way.

As the stock moves higher it may be spending more money to repurchase fewer shares, but it's the right call for a company that issues too many shares during its darkest days.

SXM17 will take time

Sirius XM went public earlier this year with what it's calling SXM17, a new platform that blends satellite broadcasts with smartphones or mobile Wi-Fi. It didn't have anything new to say, but it did point to next January's CES expo as the time when it will make more details available. It could be a game changer for a company that's already defying the naysayers by posting steady growth and consistent profitability.

The article 5 Things Sirius XM's Management Wants You to Know originally appeared on Fool.com.

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