Sirius XM Radio Inc.'s subscriber growth received a cool reception on Wall Street as investors became worried that the satellite radio company might lose customers early next year when its 12% price hike takes effect.
In announcing its third-quarter earnings Tuesday, the New York company reported 21.3 million subscribers as of Sept. 30. That's up 334,000 from July — mostly from consumers who bought new cars and began subscribing to the service — but below analysts' expectations of as many as 400,000 new subscribers.
Combined with the Jan. 1 price increase, investors fretted that Sirius could end up losing subscribers, pushing Sirius' shares down as much as 8% in early-morning trading. The stock recovered some of that loss, closing at $1.73, down 6 cents, or 3.4%.
Sirius Chief Executive Mel Karmazin in August said the company would raise its prices after federal regulators lifted a three-year ban on price increases that it imposed as a condition of allowing Sirius to merge with XM in 2008. Subsequently, the company announced that starting next year, the base price of its radio service would rise to $14.49 a month from $12.95.