XM Satellite Radio, which plans to merge with rival Sirius Satellite Radio, on Thursday reported a smaller first-quarter loss as it reaped more revenue from subscriptions, sending its shares higher.
The first-quarter loss attributable to common stockholders narrowed to $122 million, or 40 cents a share, from $149 million, or 60 cents a share, a year earlier.
Analysts had expected a loss of 41 cents a share, according to Reuters Estimates.
XM said it had added about 285,000 net new subscribers in the quarter, for a total base of more than 7.9 million. In the year-earlier period, the company added 569,000 users.
First-quarter revenue rose 27% to $264 million for XM, which in competition with Sirius offers a nationwide radio service of music, talk and sports programming for about $13 a month.
XM said the average cost of adding each subscriber, a measure known as SAC, rose to $65 in the first quarter from $59 a year earlier. Cost per gross addition, which includes SAC as well as marketing costs, increased to $103 from $93.
The Washington-based company, whose programming includes Major League Baseball and Oprah Winfrey, said its churn rate, a measure of subscribers that quit the service, held at 1.8% for the third consecutive quarter.
At Wednesday's close, XM stock had fallen 21% since Feb. 19, when Sirius announced its planned purchase of the company.