XM Satellite Radio’s loss narrows

XM Satellite Radio Holdings Inc., which last week announced plans to combine with rival Sirius Satellite Radio Inc., said Monday that a 45% jump in revenue and a tighter leash on marketing costs helped narrow its fourth-quarter loss.

The Washington-based company, which has never reported a profit, said it lost $263.1 million, or 90 cents a share, after paying preferred dividends in the final three months of 2006. That beat a loss of $270.4 million, or $1.22 a share, a year earlier. Quarterly revenue increased to $257 million from $177 million.

The fourth-quarter loss includes a one-time charge of $57.6 million to reflect the declining value of XM’s 23% stake in Canadian Satellite Radio. Excluding that, XM lost 70 cents a share, a penny better than the consensus estimate of analysts surveyed by Thomson Financial.

XM shares fell 17 cents to $14.93.

XM finished the year with 7.6 million subscribers, a 29% increase from a year earlier, when it had 5.9 million. But XM had predicted at the beginning of 2006 that it would have 9 million subscribers by that point.

Subscriptions slowed as smaller competitor Sirius, which added shock jock Howard Stern to its programming lineup, gained share of the market, particularly on radios sold through retail outlets as opposed to those installed in automobiles during assembly.