The Zacks Analyst Blog Highlights: SIRIUS XM Radio, Comcast, Fiat SpA, General Motors and Ford Motor

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May 04, 2011, 09:30 ET

CHICAGO, May 4, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: SIRIUS XM Radio Inc. (Nasdaq: SIRI), Comcast Corp. (Nasdaq: CMCSA), Fiat SpA (OTC: FIATY), General Motors Co. (NYSE: GM) and Ford Motor Co. (NYSE: F).

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Here are highlights from Tuesday's Analyst Blog:

SIRIUS XM Meets Zacks Estimates

SIRIUS XM Radio Inc. (Nasdaq: SIRI) declared its financial results for the first quarter of 2011 that barely met the Zacks Consensus Estimates. Quarterly GAAP net income was $78.1 million or 1 cent per share compared with a net income of $41.6 million or 1 cent per share in the prior-year quarter. First quarter EPS of 1 cent was exactly in line with the Zacks Consensus Estimate.

Quarterly total revenue of $723.8 million was an improvement of 9% year over year, and slightly below the Zacks Consensus Estimate of $726 million. The year-over-year revenue growth was primarily attributable to an increase in the subscriber base, higher sale of "Best of" programming, and rate increases to the company's multi-subscription and Internet packages.

Quarterly total operating expenses were $559.7 million compared with $538.6 million in the year-ago quarter. Operating income, in the first quarter of 2011, was $164.2 million compared with an operating income of $125.1 million in the year-ago quarter. Quarterly adjusted EBITDA was $181.4 million compared with $157.8 million in the prior-year quarter.

During the first quarter of 2011, SIRIUS XM generated $18.1 million of cash from operations compared with a cash consumption of $37.7 million in the prior-year quarter. Free cash flow (cash flow from operations less capital expenditures) in the reported quarter was a negative $16.8 million compared with a negative $127.2 million in the year-ago quarter.

At the end of the first quarter of 2011, SIRIUS XM had $433.7 million cash and cash equivalents and $2,766.8 million of outstanding debt compared with $586.7 million cash and cash equivalents and $2,891.7 million of outstanding debt at the end of fiscal 2010. At the end of the reported quarter, debt-to-capitalization ratio was 0.90 compared with 0.93 at the end of fiscal 2010.

Future Financial Outlook

Management projected that full-year 2011 revenue of SIRIUS XM will be approximately $3 billion. Free cash flow in 2011 will approach $350 million. The company estimated that it will add 1.4 million net new subscribers in 2011. Adjusted EBITDA, in fiscal 2011, is likely to reach $715 million.

Recommendation

SIRIUS XM is the largest broadcast radio services provider in the U.S. and the second largest entertainment subscription services provider after Comcast Corp. (Nasdaq: CMCSA). We maintain our long-term Neutral recommendation for SIRIUS XM. Currently, it holds a short-term Zacks #4 Rank (Sell). This is primarily due to the growing competitive threat from Pandora Internet radio.

Chrysler: 1st Profit in 5 Years

Chrysler Group LLC, 25% owned by Italy's Fiat SpA (OTC: FIATY), posted a profit of $116 million in the first quarter of 2011 compared with a net loss of $197 million in the year-ago quarter. Operating profit, excluding taxes, interest and pension-related costs, more than tripled to $477 million from $143 million a year earlier. The higher profit was attributable to higher sales and better pricing and mix.

This is the first quarterly profit reported by the company since 2006. The company has emerged from bankruptcy protection a little less than two years ago.

Revenue surged 35% to $13.1 billion, driven by sales of latest models. Sales of the revamped Jeep Grand Cherokee SUV shot up 64% while that of the newly launched Chrysler 200 sedan more than quadrupled over those of its predecessor, the Sebring during the quarter.

Global deliveries in the quarter rose 18% to 393,879 vehicles from the year ago level. The average price paid per vehicle increased $1,000 to $28,300.

The automaker's cash balance stood at $9.9 billion as of March 31, 2011, up from $2.5 billion as of December 31, 2010.

Chrysler expects to earn between $200 million and $500 million in 2011, which would help the company hold an initial public offering (IPO) later this year or early next year. It also expects to save $100 million in the second half of 2011 due to its debt refinancing and incur charges of about $500 million associated with paying off the loans early.

Chrysler is the third Detroit automaker after General Motors Co. (NYSE: GM) and Ford Motor Co. (NYSE: F) to report a profit after the global economic crisis. General Motors has already reported four profitable quarters while Ford recorded its eighth consecutive quarterly profit last week.

Ford posted a profit of $2.61 billion or 62 cents per share during the first quarter that was the best since the same quarter in 1998. Its profit rose from $1.76 billion or 46 cents per share in the first quarter of 2010. General Motors will release its first quarter results this week.

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