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4 Questions for Sirius XM Radio Inc (SIRI) to Answer Tomorrow

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Sirius XM Radio Inc (NASDAQ:SIRI) is rocking these days.

The satellite radio provider hit a four-year high on Friday, and now investors are hoping that tomorrow’s quarterly report will keep the good times rolling.

Sirius XM Radio Inc (SIRI)There will be opportunities. There will be challenges. More important, there will be answers. Let’s go over some of the meaty questions that Sirius XM may be able to address tomorrow morning.

1. How are the important metrics holding up?
Sirius XM already treated investors to some good news last month. The media giant revealed that it closed out the year with 2 million net additions in 2012. Sirius XM had less than 1.5 million net additions through the first nine months of the year, so it closed out the holiday quarter with more than 500,000 net new subscribers to hit 23.9 million.

Sirius XM even initiated its 2013 guidance at the time, so it’s unlikely that it will refresh those goals just four weeks later.

Revenue, earnings, EBITDA, and free cash flow will be new metrics announced tomorrow morning. However, trend watchers will also want to see how some of the other performance metrics are holding up.

How is Sirius XM’s conversion rate faring? Less than half of buyers of new cars with satellite radio receivers continue to pay for it after their free trials run out. Sirius XM updates that metric quarterly. Is churn — the average number of listeners that Sirius XM loses in a month — holding steady just below 2%? Is average revenue per user — a gauge that has been inching higher given Sirius XM’s rate increase early last year, but also climbing as subscribers upgrade their plans to include more content and streaming access — still on the rise? Is Sirius XM generating more ad revenue on its non-commercial-free channels? Are programming and content costs still in control?

Investors will have a clearer snapshot on all of these things tomorrow.

2. Is Interim CEO James Meyer a permanent CEO?
Mel Karmazin took investors by surprise when he revealed late last year that he would not stick around after his now expired contract runs out.

The company wasted no time in promoting James Meyer — Sirius XM’s president of sales and operations since 2004 — to replace Karmazin.

He was also recently added to the company’s board of directors, and that’s a sign that Liberty Media Corp (NASDAQ:LMCAD) — now calling the shots with a majority stake interest in the company — likes him.

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