SOURCE: The Bedford Report

The Bedford Report

November 23, 2010 08:46 ET

New Car Sales Could Be Ready to Surge -- Sirius Poised to Benefit

The Bedford Report Provides Analyst Research on Sirius XM & Entercom Communications

NEW YORK, NY--(Marketwire - November 23, 2010) - Satellite broadcasters have garnered substantially better results than their standard radio peers during the economic downturn due in large part to its subscriber based service. Leading the way, shares of the satellite radio juggernaut Sirius have risen as much as 52% since September as traders were impressed by the company's steady profit margins. The recent success of Sirius has steered investors further away from standard "terrestrial" radio broadcasters, whose revenues are garnered largely from advertising. The Bedford Report examines the outlook for companies in the Broadcasting-Radio Industry and provides research reports on Sirius XM Radio, Inc. (NASDAQ: SIRI) and Entercom Communications Corp. (NYSE: ETM). Access to the full company reports can be found at:

Sirius continues to add subscribers at an impressive rate. During the third quarter of 2010, Sirius added 334,727 subscribers, which raised the company's total subscriber base to 19,862,175. The third quarter was Sirius' fifth consecutive quarter posting net subscriber additions. Sirius projects that its year-end subscriber base will be approximately 20.1 million.

Sirius believes that the company will see more subscriber growth going forward as the auto industry continues to rebound. The company's CFO David Frear recently stated at a Bank of America Merrill Lynch Credit Conference that he expects over 70 million cars to have a satellite radio as soon as 2015.

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This year, new car sales have been sluggish in the US. Last month J.D. Power and Associates said 2010 annual sales for new vehicles would be near 11.5 million, down from its earlier forecast of 11.6 million. In fact auto dealers have been citing used cars -- which are less likely to come with satellite radio -- as the primary revenue driver this year.

There is optimism that new car sales could be ready for a surge. According to TrueCar -- a firm that spots industry trends -- the price of vehicles about three years old is up around 7 percent compared with last year. Chief Executive of Asbury Automotive Group, Charles Oglesby, makes the argument that "as the gap between the price of used and new vehicles narrows, some consumers may be prompted to buy new cars."

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