Sirius XM sees growth, confident on debt

By Franklin Paul

NEW YORK (Reuters) - Sirius XM Radio Inc (SIRI.O) Chief Executive Mel Karmazin is optimistic the satellite radio provider can outlast the car industry's turmoil and overcome its own debt issues, but admits these problems have punished its shares.

Speaking at the Reuters Media Summit in New York, Karmazin also forecast double-digit revenue growth in the fourth quarter and says Sirius can boost revenues in 2009, unlike other media companies.

Despite a 75 percent fall in its share price since July, Karmazin insists Sirius' underlying fundamentals are sound: it offers popular programing like Howard Stern's talk show and commercial-free music for which millions are already paying about $13 a month. What is more, people will keep buying cars no matter how dire things may seem in the auto industry now, he said.

"The merger has made us control our costs (and) we are dealing with going to significant profitability in the years ahead," Karmazin said. "Is everything rosy? Of course not. But what's going on is not operationally problematic."

Created by Sirius' acquisition of XM Satellite Radio, the company is the biggest U.S. satellite radio provider and one of the largest U.S. subscription services with about 18.9 million subscribers.

However, its growth is tied to the automobile industry, which is ailing and seeking a federal government bailout as the world financial crisis lingers.

About half of new cars being sold have satellite radios installed in them and about half of those become satellite radio subscribers, Karmazin said. Sirius' radios are also sold in retail stores.

"We're continuing to grow because some people are still buying cars," he added, noting that even a bankruptcy in the auto industry would not significantly stall Sirius.