Key Things to Watch out for in Sirius XM Holdings Inc. (SIRI)’s Earnings

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Sirius XM Holdings Inc. (NASDAQ:SIRI) releases its 4Q earnings on Thursday this week. As the satellite radio company reports earnings, investors should watch out for updates on auto sales. Sirius XM enjoys a monopoly in the U.S. satellite radio market. Analysts have cited that the company has a huge opportunity to grow in the auto segment as used cars as replaced with newer cars. The company already has agreements with the major automakers to install its satellite radio system in their cars. Sirius XM targets both new and used cars for its satellite radio connection.

Sirius XM Holdings Inc. (NASDAQ:SIRI)’s network of automakers include Ford Motor Company (NYSE:F) and Toyota Motor Corp (NYSE:TM). The company also has satellite radio deals with car rental companies. The agreements give the company the exposure that it needs to boost its subscriber base in the auto segment.

Falling oil prices supports conversion to paid subscribers

Wall Street expects Sirius XM Holdings Inc. (NASDAQ:SIRI) to benefit from the falling oil prices in more than few ways. The drop in oil prices means that drivers can save more at the pump and they could use such savings to convert to paid satellite radio subscribers, thereby boosting Sirius XM’s revenue.

Big exposure

The other benefit for Sirius XM Holdings Inc. (NASDAQ:SIRI) in the falling oil prices is that it is boosting car sales. Given that the company already has agreements with the major car manufacturers, more vehicle sales means putting its satellite radio service in front of more potential subscribers.

Auto sales were up in the U.S. to 16.5 million vehicles, being the industry best in nearly eight years. It is predicted that 2015 will also see a huge bump in auto sales with as many as 17 million vehicles expected to be sold in 2015.

It will be interesting to watch out what the management of Sirius XM Holdings Inc. (NASDAQ:SIRI) has to say about growth in the auto segment.

Better than expected subscriber addition

Overall, the company is doing well and the management promised that better things were still to come. Sirius XM Holdings Inc. (NASDAQ:SIRI) ended 2014 with 27.3 million subscribers, having added 1.75 million new subscribers in the year, ahead of the estimate of 1.5 million. The company expects to add 1.2 million more subscribers in 2015 and generate $4.4 billion of revenue for the year.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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