UPDATE, 6:15 AM: CEO Mel Karmazin is known as a straight-shooter, but showed today that he can also be diplomatic about a sensitive subject that hits close to home: Analysts in a conference call wanted to know what’s up with the FCC petition by John Malone’s Liberty Media to take over the rights to the satellite radio company’s broadcast licenses. Liberty says it has “de facto control” of Sirius XM by virtue of its 40% of the company’s stock, and right to hold five of the 13 board seats. Karmazin says he’s confident that the FCC will reject the petition. Although Liberty has “significant influence,” Karmazin says that “our board absolutely concluded that they do not have de facto control…40 is not the new 50.” He says that he isn’t sure why Malone’s company filed its FCC petition. “Liberty has not indicated anything that they want to do. When they get asked, why are you doing it, they say they want to keep all of their options open.” While Karmazin wouldn’t criticize his largest shareholder, he added that “if the time ever comes that Liberty’s interests are different than the 60% shareholders, then we will do whatever we can do to protect the interest of our 60% shareholders.” Karmazin says he’s now just waiting to hear from the FCC.

The CEO continued to crow about the company’s Q1 performance, especially with subscriptions. “The reaction to the price increase has clearly exceeded our expectations….We could not have hoped for a better outcome.” He expects to see about 1M gross subscriptions this year from people buying used cars — a growing market for Sirius XM. He told analysts that he’s been loading up on sports programming as part of his strategy to compete with terrestrial radio and online music services such as Pandora and Spotify. For example, the satellite radio company now also offers every Major League Baseball game on smartphone or computer. Sirius XM’s on-demand service will launch this summer on the Web, smartphones and other connected devices. In addition, Chrysler will offer Sirius XM’s 2.0 radios in its cars beginning this summer. Karmazin says he’s open to the idea of returning some of the company’s cash to shareholders. “There is nothing that we’re seeing out there that we’re anxious to acquire,” he says. But no decisions have been made yet.

PREVIOUS, 4:23 AM: Shares are up slightly in pre-market trading as the improving economy, and especially auto sales, enabled the satellite radio company to project that it will gain 1.5M subscribers in 2012 — up from its previous estimate of 1.3M. The forecast was part of Sirius XM’s Q1 report that showed net income of $107.8M, up nearly 38% vs the same period last year, on revenues of $804.7M, up 11%. The revenue figure was slightly ahead of the $803.8M the Street expected. Earnings of 2 cents a share matched the consensus forecast. The company says that, despite the $1.54 price increase in January — which raised the monthly cost of its service to $14.49 — it gained 299,348 subscriptions in Q1. That brought total subs to 22.3M. The monthly churn rate also dropped modestly to 1.9% from 2% in the first three months of 2011. CEO Mel Karmazin says that the company plans to increase the number of channels it offers via its new generation of Sirius XM 2.0 radios — which enable users to create personalized channels (similar to Pandora), as well as pause and rewind programming. “In 2012, we continue to expect record revenue, adjusted EBITDA, and free cash flow, and our subscriber base will also finish this year at another all-time record high,” Karmazin says.