Sirius Satellite posts Serious loss, to add more states

LOS ANGELES, May 14 Reuters has reported that Sirius Satellite Radio Inc. on Tuesday reported a wider first-quarter loss and said it would launch its satellite radio service in 10 more states on Wednesday in an attempt to rapidly build up its still tiny subscriber base.

In the first quarter, Sirius began taking on subscribers for a monthly fee of $12.95 for its service, which includes 100 channels of all-digital music, talk and sports programming, with some commercial-free channels. It said it had 412 subscribers at the end of the quarter.

The company has forecast it will have 100,000 to 150,000 subscribers by year-end and analysts have estimated it needs about 3 million subscribers to break even on a net basis.

Sirius, which launched its service in four cities on Feb. 14, intends to have nationwide coverage by July 1. The service has been steadily rolling out to more locations and will be available in 28 states this week.

The 10 new states to be added are Alabama, Indiana, Kentucky, Michigan, Mississippi, Ohio, Tennessee, Texas, West Virginia and Wisconsin.

Sirius shares closed up 5 percent at $4.41 on Nasdaq. Year-to-date, the shares are down more than 60 percent.

New York-based Sirius reported a net loss of $90.1 million, or $1.22 per share, for the first quarter, compared with a loss of $64.4 million, or $1.34 per share, a year earlier.

Analysts surveyed by Thomson Financial/First Call on average had expected a loss of $1.26 per share, with estimates ranging from 87 cents to $1.55.

Revenue rose to $33,000 from zero a year earlier.

CASH BETTER THAN EXPECTED

The company's cash position at the end of the quarter was $423 million. Its cash levels are important because the company has said it is funded only through early 2003 and will need to raise more funding.

John Stone, an analyst at Ladenburg, Thalmann & Co. who covers the industry, said Sirius' cash position was better than his projections. The company has enough cash to last into the second quarter of 2003, he said.

Sirius also said it had expanded its deal with DaimlerChrysler to have its service as a dealer-installed option at Chrysler, Jeep and Dodge dealers later this year. The satellite radio will be a factory-installed option on certain 2003 model-year cars, the company said.

Sirius has only one competitor in the satellite radio broadcasting industry, XM Satellite Radio Holdings Inc. XM shares were up 6 percent at $8.81, also on Nasdaq.

XM charges $9.99 a month for its service, which was launched nationally last fall.

Radios that add satellite programming to existing car stereos generally sell at retail for anywhere from $80 to $300.