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UPDATE 2-SiriusXM raises full-year subscriber forecast

Wednesday, 10 Oct 2012 | 3:13 PM ET

* Will add 446,000 new subscribers for Q3

* Raised full-year forecast to 1.8 mln net additions

* Considering shareholder return

(Adds more executive comment, background)

By Jennifer Saba and Peter Lauria

Oct 10 (Reuters) - Sirius XM Radio Inc CEO Mel Karmazin said the company will add 446,000 new subscribers for the third quarter and raised its full-year forecast to 1.8 million net additions.

Karmazin gave the updated business outlook for the satellite radio broadcaster while speaking at Liberty Media Corp's

annual investor day on Wednesday. Liberty, controlled by billionaire John Malone, is Sirius's largest shareholder with a stake of just under 50 percent.

Liberty has been trying for months to wrest full control of Sirius, going so far as to file a petition with the U.S. Federal Communications Commission to replace the company's board. Liberty has argued that Sirius should be more aggressive about pursuing better technology and expanding internationally.

Karmazin gave no indication during his presentation about whether he will leave Sirius or renew his contract, which is due to expire at the end of the year. Analysts didn't put the question to Malone after the executive presentations.

Karmazin, who famously clashed with Sumner Redstone while at Viacom Inc , is known for his disdain of working for a controlling shareholder, and has indicated that Liberty likely wouldn't need him stick around if it took control.

Liberty acquired an initial stake of about 40 percent in Sirius in 2009 as part of a deal in which it loaned the satellite radio provider $530 million to help stave off bankruptcy.

Under Karmazin, Sirius has grown its subscriber count to 23.4 million as of the end of the third quarter, and maintains an estimated 70 percent market share of new cars sold in the United States. Karmazin also helped negotiate new contracts to keep signature talent on the air, most notably popular "shock jock" Howard Stern.

Still, Sirius is on the hunt for potential acquisitions. Karmazin said that the company looked at four potential buys this week.

"There is nothing out there we have seen that is appropriate for the company to do," he said.

In place of an acquisition, Karmazin said that its pile of cash would be better served in the hands of shareholders but that decision is ultimately up to the board.

A raft of competitors including Clear Channel Communications and the mostly free online streaming music company Pandora Media , which has legions of listeners and has been steadily gaining market share, hasn't stopped Sirius.

Indeed, Karmazin said that one of Sirius' major advantages over terrestrial radio was that it was able to put on "adult content."

"We don't just have to put on programming appealing to children," Karmazin said.

Sirius raised its net subscriber forecast for this year to 1.8 million from 1.6 million. The company expects to end the year with roughly $3.3 billion in revenue and about $700 million in free cash flow.

Shares of Sirius rose more than 3 percent to $2.71 in afternoon trading on Wednesday.

Karmazin was one of several executives from Liberty's businesses presenting outlooks, including book retailer Barnes & Noble Inc , concert promoter Live Nation Entertainment Inc , and premium pay-TV network Starz LLC, which it plans to spin off into a separate public company.

(Reporting By Jennifer Saba; Writing by Peter Lauria; Editing by Gary Hill)

((jennifer.saba@thomsonreuters.com)(1 646 223-6173)(Reuters Messaging: jennifer.saba.reuters.com@reuters.com))

Keywords: SIRIUS LIBERTY/INVESTOR

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