NEW YORK (AP) - Sirius XM Radio Inc. on Tuesday said strong subscriber growth helped fuel revenue, and the satellite radio company raised its profit outlook for the year.
Subscriber numbers were in line with a prediction the company had made in July.
Net income came to $3.13 billion, or 48 cents per share, up from $173.3 million, or 3 cents per share, a year ago. The quarter benefited from a one-time $3 billion tax adjustment, which reflects the company's position that it will be able to use years of operating losses to offset taxes on profits going forward.
Excluding the tax benefit, adjusted results came to 2 cents per share, which matched the forecast of analysts polled by FactSet. Analysts tend to exclude one-time events from their forecasts.
Revenue rose 13 percent to $837.5 million, beating the $834.1 million expected by analysts, as the company added a net 622,042 subscribers in the quarter, ending the period with 22.9 million subscribers. That matched its announcement in July.
The cost of acquiring each new subscriber was $54 and average revenue per user rose to $11.97 per month from $11.53 a year ago.
Both metrics beat predictions by Morgan Stanley analyst Benjamin Swinburne, who said the better-than-expected revenue per user indicated that the company was not relying on big discounts to keep customers.
Sirius XM has hung on to customers despite a $1 per month price increase rolled out to about half of customers since the beginning of the year.
The company raised its outlook for annual earnings before interest, taxes, depreciation and amortization to $900 million from $875 million a month ago. It maintained its view that it would add nearly 1.6 million net subscribers for the year, with revenue approaching $3.4 billion.
Shares rose 7 cents, or 3 percent, to $2.27 in afternoon trading.
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