It has been about a month since the last earnings report for Sirius XM (SIRI). Shares have lost about 10.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sirius XM due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sirius XM Holdings reported first-quarter 2024 earnings of 7 cents per share, which beat the Zacks Consensus Estimate by 16.67% and remained flat year over year.
Total revenues on a reported basis gained 0.8% year over year to $2.16 billion and beat the consensus mark by 1.32%.
Subscriber revenues (77.7% of total revenues) declined 0.7% from the year-ago quarter to $1.68 billion. The figure beat the Zacks Consensus Estimate by 1%.
Meanwhile, advertisement revenues (18.6%) increased 7.2% year over year to $402 million. The figure beat the Zacks Consensus Estimate by 4.14%.
Equipment revenues (2.3% of total revenues) rose 8.7% year over year to $50 million. The figure beat the Zacks Consensus Estimate by 9.65%.
Other revenues (1.4% of total revenues) decreased 6.3% from the year-ago quarter to $30 million and missed the Zacks Consensus Estimate by 9.96%.
Sirius XM Standalone Details
The Sirius XM Standalone segment’s revenues (77.1% of total revenues) were $1.66 billion, down 0.9% year over year.
Total subscriber base declined 1.7% year over year to 33.43 million, missing the Zacks Consensus Estimate by 0.45%.
Revenues witnessed a decline due to a 1% drop in subscriber revenues, which amounted to $1.54 billion. Advertising revenues were $40 million, down 2.4% year over year. Equipment revenues increased 8.7% year over year to $50 million. Other revenues decreased 6.3% year over year to $30 million.
Self-pay subscribers rose 3% year over year to 31.58 million. Net subscriber loss in the reported quarter was 445K against net additions of 281K in the year-ago period.
Average revenue per user amounted to $15.36, up 0.5% year over year. The figure missed the Zacks Consensus Estimate by 0.67%.
Pandora & OFF Platform Details
Pandora and OFF platform’s revenues (22.9% of total revenues) gained 7.1% year over year to $495 million, owing to an 8.4% increase in advertising revenues that totaled $362 million and subscriber revenues that improved 3.9% year over year to $133 million.
Self-pay subscribers of the Pandora Plus and Pandora Premium services decreased 64K in the first quarter of 2024 to end the period at 5.9 million.
Total subscribers decreased 4.5% year over year, ending the first quarter at 5.94 million. The figure missed the Zacks Consensus Estimate by 1.1%.
Total ad-supported listener hours were 2.49 billion in the first quarter, down 3.9% year over year. Advertising revenue per thousand listener hours was $90.88, up 6.8% year over year.
Operating Details
In the first quarter, total operating expenses decreased 0.4% year over year to $1.72 billion. The company saved approximately $45 million through cost optimization efforts and consolidation across its businesses.
Adjusted EBITDA rose 4% year over year to $650 million.
Balance Sheet & Cash Flow
As of Mar 31, 2024, cash and cash equivalents were $71 million compared with $216 million as of Dec 31, 2023.
The long-term debt, as of Mar 31, 2024, was $8.72 billion compared with $8.69 billion as of Dec 31, 2023.
For the first quarter, cash flow from operations was $308 million compared with $350 million in the year-ago quarter.
Free cash flow was $132 million for the reported quarter, down from $144 million reported in the prior-year period. The decrease was attributable to an increase in content and other vendor payments, partially offset by lower satellite capital expenditures. In addition, in the first quarter of 2024, the company invested approximately $187 million in carbon capture tax equity investments and plans to invest an additional approximately $50 million in the remainder of 2024.
These equity investments are expected to reduce the company’s cash taxes by approximately $130 million in 2024. The company anticipates the majority of the $250 million in net after-tax cash benefits to be realized in the latter part of the seven-year investment period.
2024 Guidance
Revenues are expected to be $8.75 billion. Adjusted EBITDA is projected to be $2.7 billion. Free cash flow is expected to be $1.2 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 8.92% due to these changes.
VGM Scores
At this time, Sirius XM has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Sirius XM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Sirius XM is part of the Zacks Broadcast Radio and Television industry. Over the past month, Grupo Televisa (TV), a stock from the same industry, has gained 11.7%. The company reported its results for the quarter ended March 2024 more than a month ago.
Grupo Televisa reported revenues of $939.92 million in the last reported quarter, representing a year-over-year change of -5.3%. EPS of $0.09 for the same period compares with -$0.08 a year ago.
For the current quarter, Grupo Televisa is expected to post a loss of $0.12 per share, indicating a change of -1300% from the year-ago quarter. The Zacks Consensus Estimate has changed -1100% over the last 30 days.
Grupo Televisa has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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