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Sirius XM (SIRI) to Report Q1 Earnings: What's in the Cards?

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Sirius XM (SIRI - Free Report) is set to report first-quarter 2019 results on Apr 24.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 9.17%.

Sirius XM had slightly more than 34 million total subscribers at the end of 2018. The company’s self-pay subscribers totaled 28.9 million and paid promotional subscribers were 5.1 million.

The Zacks Consensus Estimate for self-pay subscribers and paid promotional subscribers stands at 29 million and 5.1 million, respectively for first-quarter 2019.

Additionally, the consensus mark for revenues is pegged at $1.9 billion for the to-be-reported quarter. The consensus mark for earnings has remained steady at 5 cents over the past seven days.

While the revenue estimate indicates an increase of 34.8% from the year-ago quarter reported figure, the estimate for earnings implies a decline of 16.7%.


Sirius XM Holdings Inc. Price and EPS Surprise

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

Sirius XM Will Not Consolidate Pandora’s Results in 2019

Sirius XM successfully completed the acquisition of Pandora in the first quarter, making it the world's largest audio entertainment company.

Notably, the combined entity has more than 100 million listeners in North America of which 40 million constitute self-paying subscribers and the rest “trailers and ad-based listeners.”

However, the company’s 2019 guidance does not consider Pandora’s results.

Solid Content Strength to Aid Sirius XM

Sirius XM is expected to benefit from subscriber base growth and higher average revenue per user (ARPU) driven by content strength in the soon to-be-reported quarter.

The portfolio expanded from the launch of more than 100 ad free music channels on Sirius XM’s platform across various genres. Notably, the channels only available to SiriusXM’s All Access, Premier subscribers and trial users will showcase the company’s “largest ever content addition line-up.”

Sirius XM also expanded its sports related content during the quarter. The company provided extensive audio coverage for the 2019 Major League Baseball (MLB) season, Super Bowl LIII and Alliance of American Football.

Moreover, increasing demand for Sirius XM services among auto makers is a positive. During the quarter, Toyota Motor (TM - Free Report) and Sirius XM to extended their partnership through 2028.

Additionally, Sirius XM collaborated with Visa to introduce an in-vehicle payment solution. The service, which allows car users to securely make and manage purchases, will be presented to automobile manufacturers during 2019.

Intensifying Competition May Hurt User Growth

Sirius XM faces significant competition from Spotify (SPOT - Free Report) and Apple (AAPL - Free Report) in the United States. These companies took a number of initiatives to expand their user base in first- quarter 2019.  

For instance, Spotify partnered T-Series and Samsung in first-quarter 2019 for strengthening its content portfolio. Additionally, the company is taking initiatives to boost subscriber base, which is evident from its entry into India in February 2019.

Further, Apple Music added more subscribers compared to its peers in both the United States and internationally as of February 2019, per MacRumors that quoted the Wall Street Journal report.

The above initiatives may have weighed on Sirius XM’s ability to add subscribers in the quarter.

Sirius XM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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