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Here's What to Expect From Sirius XM's (SIRI) Q4 Earnings

Zacks Equity Research

Sirius XM SIRI is scheduled to report fourth-quarter 2018 results on Jan 30.

The company beat the Zacks Consensus Estimate in two of the trailing four quarters and reported in-line earnings in the other two quarters, with the average positive earnings surprise being 9.17%. In the last reported quarter, the company’s adjusted earnings of 7 cents per share beat the Zacks Consensus Estimate by a penny.

The Zacks Consensus Estimate for fourth-quarter earnings and revenues is currently pegged at 6 cents and $1.48 billion, respectively.

Sirius XM Holdings Inc. Price and EPS Surprise

Sirius XM Holdings Inc. Price and EPS Surprise | Sirius XM Holdings Inc. Quote

Let’s see how things are shaping up prior to this announcement.

Solid Content, Service Reach to Aid Subscriber Growth

Sirius XM has been witnessing healthy subscriber additions owing to its strong content lineup and expanded service reach.

Notably, the company added 1.4 million self-pay subscribers in 2018, exceeding its earlier guided figure of 1.275 million self-pay net subscribers, per management. Additionally, the company expects to meet or exceed its 2018 guidance for revenues, adjusted EBITDA and free cash flow.

Apart from music, Sirius XM continues to add content from talk shows, sports and lifestyle to provide diverse offerings to its users. Additionally, with Sirius XM-enabled radio vehicles increasing on the road, we believe the adoption of its other connected services may also increase, which is a positive.

One of the company’s connected services for car buyers includes three years of free crash alert as well as free premium services like roadside assistance for six months at a few dealership locations. Notably, over 113 million vehicles on road were equipped with Sirius XM-enabled radios, up 13% year over year in third-quarter 2018.

Moreover, Sirius XM has moved beyond cars to expand its service reach. The company’s partnership with Amazon AMZN to provide free access to a few of its subscription packages for existing Echo holders is expected to boost its subscriber base and engagement levels.

However, other players in the streaming space like Apple and Spotify are also boosting their service offerings to attract users. This may not bode well for Sirius XM.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Sirius has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are few stocks you may consider as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Deckers Outdoor Corporation DECK has an Earnings ESP of +9.49% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Wynn Resorts WYNN has an Earnings ESP of +20% and a Zacks Rank #2.

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