Directed Electronics 2007 May Start Slow

VISTA, Calif. — Directed Electronics Inc., which makes security and entertainment systems for homes and automobiles, said Friday it expects a sluggish start to 2007, due mostly to fewer new subscribers at Sirius Satellite Radio Inc.

The company said Sirius, a key customer for its satellite radio business, expects to add 2 million new subscribers in 2007, which is down from 2.7 million new subscribers in 2006. The subscriber forecast comes on the heels of lower-than-expected retail sales of satellite radio receivers in the fourth quarter, which led to higher inventory levels at stores.

Directed Electronics expects first-half earnings to fall to less than half of what it earned in the same period a year earlier, with the first quarter most challenging. It expects revenue in the range of $83 million to $87 million.

The company earned $4 million, or 16 cents per share, in the first quarter of 2006 on revenue of $74.3 million.

Directed Electronics expects fiscal year profit of between 95 cents per share and $1.05 per share on revenue in the range of $475 million to $510 million.

Last year, the company earned $21 million, or 81 cents per share, on revenue of $437.8 million

Analysts currently forecast a first-quarter profit of 17 cents per share on revenue of $109.4 million. They expect fiscal-year profit of $1.27 per share on revenue of $548 million.

Shares of Directed Electronics fell 27 cents, or 2.9 percent, to $8.95 in premarket electronic trading.

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