XM Revises Subs Forecast

For the second time this year, XM Satellite Radio Thursday (July 27) cut its year-end subscriber forecast to between 8.2 and 7.7 million. Originally, XM said it would end the year with 9 million subscribers, but in May, reduced that figure to 8.5 million blaming slow retail sales of its receivers.

XM, which made the announcement in conjunction with its second quarter earnings report, blamed the slowdown on "marketplace dynamics and regulatory uncertainties" over its plug-and-play radios which were found to run afoul of certain government emission standards. "The company will refine this range at the end of the third quarter when it expects to have a firmer sense of regulatory progress and availability of product for the fourth quarter, as well as retail sales trends," the company said in a release.

Although XM said it expects to achieve positive cash flow for fourth quarter 2006 and full year 2007, it also said that its ability to achieve those goals becomes "challenged" with a lower subscriber growth.

XM added 398,000 suscribers in second quarter for a total of 6.8 million and recently surpassed 7 million.

Earlier this week, after XM's stock hit a 52-week low, the company named Nate Davis, a member of XM's board of directors, to the newly-created position of president.