Thursday, August 6, 2009
Sirius XM: Cash for Clunker
This week has been a good one for Sirius XM Radio. The company’s shares spiked, rising about 20 percent to 54 cents on news of the government’s expanded “Cash for Clunkers” program and the positive impact it should have on new car sales and, by extension, new Sirius subscriptions. That analysts had been predicting a second-quarter loss for the satellite radio company, along with the loss of thousands of subscribers, did little to temper enthusiasm.
More bad news from Sony. This morning the electronics giant posted its second straight quarterly loss and reiterated its forecast for another year of red ink. Clearly, Sony must do more than just slash jobs and suppliers if it ever hopes to regain its position in the market.
Too bad Palm launched the Pre a week after the close of its fiscal fourth quarter. If it had brought the device to market earlier, the quarterly results it posted Thursday afternoon might have been even better. After market close, Palm posted a narrower-than-expected loss despite a steep revenue decline, sending its shares up more than 10 percent.
About the best thing to be said for Sony’s grotesque financial results is that they came in smaller than expected. The company’s 98.9 billion yen ($1 billion) loss for the fiscal year ended March–its first net loss in 14 years–wasn’t nearly as bad as the 150.0 billion yen ($1.57 billion) figure it had predicted in January or even close to the 173.8 billion yen ($1.8 billion) analysts polled by Thomson Reuters had been forecasting.
Well, what do you know. Vonage posted a quarterly profit. The Iong-suffering Internet phone company reported first-quarter earnings today and with them its first profit ever: $5 million on revenue of $224 million. Sadly, that profit was only made possible by “a $13 million mark-to-market adjustment relating to the derivative liability in the Company’s convertible debt.”
Good thing Sirius XM Radio resolved the debt issues that threatened to drag it into bankruptcy earlier this year; the company’s clearly got other things to worry about. Like fleeing subscribers. Reporting a first-quarter net loss of $236.6 million this morning, Sirius said that anemic car sales had led to its first-ever decline in net subscriber additions. And it was a nasty decline.
The econalypse is eroding demand for telecommunications equipment. Operators are cutting spending on network upgrades. Market conditions are tough, but we are taking appropriate actions. It’s a story we’ve heard before, from Ericsson, Nortel and Cisco. This morning we heard it from Alcatel-Lucent.
Motorola’s first-quarter results came in stronger than expected, although that’s not saying much because the situation at the ailing wireless handset maker appears to be increasingly dire. Motorola shipped about 19.2 million handsets in its fourth quarter. In its latest quarter, the company shipped just 14.7 million handsets, down 23 percent from the previous one. 
More ugly news from the Japanese electronics industry today. Sanyo Electric, the world’s largest producer of rechargeable batteries, this morning slashed its earnings forecast for the second time in as many months.
Yahoo’s financials for the fourth quarter–co-founder Jerry Yang’s last as CEO–were about what you’d expect: mediocre. The fourth was Yahoo’s first money-losing quarter since 2002, and the first time its revenue declined since the fourth quarter of 2001.
