Aug. 14 (Bloomberg) -- Sirius XM Radio Inc. will eliminate executive positions to cut costs following the merger of the only two U.S. satellite radio companies, Chief Executive Officer Mel Karmazin said.

Sirius's $2.76 billion all-stock purchase of XM Satellite Radio Holdings Inc. in July created a company with more than 18.5 million subscribers. It could report $300 million in earnings next year, excluding some items, Karmazin said today in interviews in New York.

Karmazin said he has identified positions that could be eliminated, creating ``extraordinary'' cost savings. The company has said it will save $400 million as a result of the merger, which received final regulatory approval last month.

``We're not going to need two different people'' making sales calls to retailers, said Karmazin, 64. ``We're not going to need two chief financial officers, two general counsels.'' Karmazin said he would detail the cuts next month.

Sirius XM, based in New York, rose 5 cents to $1.43 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares, which have declined 53 percent this year, dropped 16 percent July 29, the day the company said the deal had closed.

Subscriber growth has slowed for both XM and Sirius along with new U.S. car sales, the main source of new customers. Karmazin faces ``an uphill battle'' in seeking growth from ``a crippled U.S. consumer,'' said Fred Moran, an analyst with Stanford Group in Boca Raton, Florida.

`Difficult Task'

``Mel Karmazin has to balance cost control with growth, which is a very difficult task,'' Moran said in an interview. ``The company is still in its very early stages of development and needs to dramatically increase its subscribership.'' Moran recommends holding on to the shares and doesn't own any.

Karmazin said Sirius XM can increase revenue even as carmakers struggle because an increasing proportion of new cars are equipped to receive satellite radio transmissions.

Sirius XM will also introduce new products based on technology XM was developing before the takeover. Researchers at XM's development center in Boca Raton are working on some ``very, very cool'' devices, he said.

``We need another year or two in order to demonstrate the profitability of the company,'' Karmazin told Bloomberg Radio, which is carried on Sirius and the Washington-based XM unit.

To contact the reporter on this story: Pimm Fox in New York at pfox11@bloomberg.net; Todd Shields in New York at tshields3@bloomberg.net

Last Updated: August 14, 2008 16:05 EDT