XM Satellite Radio officials expressed continued optimism that the company’s mergerwith competitor Sirius will be approved, as they discussed the company’s quarterly financial results in a conference call with investors Thursday.
The company, which announced the impending resignation of Chief Executive Officer Hugh Panero earlier in the week, reported revenues of $277 million during the second quarter of 2007, a 22 percent increase from $228 million during the same time period last year. XM ended the quarter with 8.25 million subscribers.
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Panero’s resignation was discussed during the call. Panero said that early on in the discussions about a merger, it was decided Sirius CEO Mel Karmazin would lead the combined companies. Panero stayed on until he felt the merger had progressed significantly that he felt comfortable leaving.
“There was only going to be one CEO and it was time for me to move on, and this is a great time to do it, particularly when I’ve been with the company with more than 10 years,” Panero said.
Officials remained confident the merger, which the Federal Communications Commission and Department of Justice are now considering, will be approved. Panero said during the call that the FCC received more than 5,000 comments in reference to the merger, with individuals supporting it by a 4-1 ratio.
The next two months will be pivotal for the merger, said analyst Jonathan Jacoby with Bank of America Securities in a note to investors. Jacoby said recent political lobbying by the companies has been effective, but approval of the deal is by no means certain.
“The merger could fall victim to politics even if procedural hurdles are cleared,” Jacoby said in the note.
