Sirius XM Receives More Upgrades After Historic Quarter, S & P Credit Outlook Positive
by king1 on Nov.18, 2009, under SIRI
By Relmor Demitrius -
As expected by readers of kingofalltrades.com, and as our own Rick King forecasted after Sirius XM Radio’s latest quarterly report, the upgrades and positive news just keeps coming. S & P has now raised Sirius XM’s credit outlook from Stable to Positive. They maintain a hold on their B- Corporate rating, keeping them still on the verge of being removed from speculation grade, and entering the world of investment grade status. Since their outlook is now positive, this means you can expect a credit upgrade from S & P within 3 months to one years time.
This came after Sirius XM reported break even earnings for the first time in its history. Costs were controlled yet again, and revenue was up. Refinancing existing loans in 2009 with better rates, due much later, and even used cash to remove debt. They also had 60 million shares lent for shorting bonds returned to them, and they were destroyed. This has raised the attention of the number one equity and bond rating service in the world. S & P’s own Tuna Amobi has reiterated his Hold opinion on Sirius XM, and his $1 price target on a stock currently trading well off that mark.
THOMSON REUTERS™ has raised Sirius XM’s guidance for the year, adjusted from a .09 cent loss for the year, to .08 cent loss for the year. Having lost .10 cents already, this indicates a .02 cent earnings profit will be reported by Sirius XM in Q4. This would make this historic quarter by Sirius XM dwarf in comparison if Sirius XM is able to execute on this guidance (Sirius XM’s guidance on EBITDA for the year so far is looking accurate).
Guidance for 2010 has also been raised from .03 cent loss, to only .01 cent loss. As you can see by how they are performing lately, and knowing most of the losses for Sirius XM came from charges and accounting issues and stock dilution in 2009, I think a .01 cent loss is way too conservative.
Disclosure: Long SIRI
3 Comments for this entry
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November 18th, 2009 on 9:02 am
Seems like the market is still skeptical & holding its collective breath on Sirius Xm (great 3rd quarter report w/ not much stock price movement to reflect performance). With so much negative press it seems to be understandable. But on the flip side I would think that if Sirius Xm follows thru on what you are saying then they could be set to be headed for another huge stock price increase in 2010.
November 18th, 2009 on 11:27 am
Corrected Spelling (AGAIN) YIKES!
I wish they (SIRIUS) would go on the pink sheets so the “big money” guys can’t play. Thank you SIRIUS for providing me a safe haven to park my son’s college education money. He is in thrid grade and I own a boat load today. Can you imagine what SIRIUS stock will be worth in nine years!
John Zarlino
Your Car Guy
jdzarlinoyourcarguy@yahoo.com
November 18th, 2009 on 3:38 pm
Its articles like this that gets suckers to buy the stock. here do you get your info? I get mine from SEC filings.
You stated
“This came after Sirius XM reported break even earnings for the first time in its history.”
This is utterly false.
Net loss attributable to common stockholders
Q3=(149,190)
Q1 thru Q3=(543,145)
Both time periods were a loss IE this is not positive/break even earnings.
You also stated
“Costs were controlled yet again, and revenue was up.”
Q3 expenses for Q3 are actually up over last 2 quarters of 2009, but you can parse this one for arguments sake.
You also said
“Refinancing existing loans in 2009 with better rates, due much later, and even used cash to remove debt.”
You make it sound like they have cash and are paying things down. While the rate is lower than the 15%, it cost them $130 million +- to refi and the cash they used was cash obtained from cashign in on dilutung with more shares.
But I guess you are in so deep you are desparate to spin this as if SIRI is just doing dandy.
PS The amount of debt they owed in Jan 2009 is now higher as of Nov 18, 2009…..nothing has changed, it’s more of the same shell game.
good luck.