While XM officials reported a narrower loss for the fourth quarter of last year, executives were more cautious when discussing the impending decision on whether a merger with rival Sirius will be approved.
XM Satellite Radio posted a loss of $239 million during the fourth quarter of 2007, compared with $263 million during the same period the year before.
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Executives at the D.C. company had predicted the Department of Justice and Federal Communications Commission would approve a merger by the end of 2007, but both agencies have remained mum since then.
“While obviously we can’t provide any assurances regarding the timing or the outcome, we expect and continue to look forward to a timely, positive resolution,” Chairman Gary Parson said during a teleconference with investors.
Still, for the first time executives began to address the possibility that a merger might not happen, saying the company was “fully funded” to operate independently if necessary.
Executives would not give specifics about what sort of financial backup plan XM has if a merger is not approved. CEO Nate Davis said the company would look with a “magnifying glass” at the company’s expenses and cost structure.
XM and Sirius had set a Saturday deadline, at which point either party could walk away from the merger.
Executives said investors would meet at that point to discuss the situation, and said an extension of that date was a possibility.
“It seems that the Street is too optimistic about the prospects of merger approval,” Banc of America Securities analyst Jonathan Jacoby said in a note to investors, predicting less than a 30 percent chance of approval for the deal.
