Sirius XM Holdings Inc. (Nasdaq: SIRI) reported revenue of $1.4 billion in the fourth quarter of 2017, an increase of 8 percent over the same period in the prior year as it added 527,000 subscribers.
But the company’s stock dropped more than 1.6 percent in premarket trading as Sirius XM reported adjusted fourth-quarter earnings of 1 cent per share and a net loss of $37 million. Wall Street was expecting EPS of 5 cents, according to FactSet.
[See: 10 Ways to Invest in Driverless Cars.]
The satellite radio operator reported its fourth quarter and full-year 2017 net income includes a $185 million, or 4 cents per diluted share, charge due to the company’s deferred tax assets as a result of the tax reform bill passed by the GOP-led Congress.
The number of subscribers rose in the fourth quarter, marking the best quarter for growth in five years, says CEO Jim Meyer. Sirius added 1.56 million listeners in 2017, bringing the total to 27.5 million subscribers.
“We exceeded all of our 2017 subscriber and financial guidance, even after increasing these targets during the year,” he says. “I am particularly pleased that we achieved this growth in an environment of slowing auto sales.”
The company’s adjusted EBITDA grew 14 percent in the fourth quarter to a record $542 million, and 13 percent in 2017 to $2.12 billion.
Sirius XM added $2 billion to its stock buyback program, bringing the satellite radio operator’s buyback program to a total of $12 billion since it began in 2013.
[See: The 10 Most Valuable Auto Companies in the World.]
The company’s guidance for 2018 is positive and is “roughly in line with our expectations,” says KeyBanc Capital Markets analyst Andy Hargreaves in a January research report. Sirius guided the addition of 1 million subscribers versus Keybanc’s estimate of 1.1 million, $5.7 billion in 2018 revenue versus Keybanc’s estimate of $5.73 billion, and 2018 adjusted EBITDA of $2.15 billion versus Keybanc’s estimate of $2.05 billion.
Economic conditions could hamper future sales only if a large decline in both new and used car sales occurs in 2018, he said.
KeyBanc Capital Markets has a “sector weight” rating and $5.31 price target for Sirius stock.
More from U.S. News
10 Investing Themes to Remember for 2018
7 of the Best Bank Stocks to Buy for 2018
7 of the Best Health Care Stocks to Buy for 2018
Sirius XM Holdings Inc. (SIRI) Is an Earnings Disappointment originally appeared on usnews.com
