UPDATE, 6 AM: Sorry, analysts didn’t ask about Howard Stern — and Sirius XM doesn’t allow reporters to participate in its quarterly calls with The Street. So Mel Karmazin stuck with the themes that have served him reasonably well over the years: Promises of cost cuts and lots of love for Wall Street. He crowed that Sirius XM will end 2011 offering “more channels with less programming expense” than it did last year. He put subscribers on notice to expect an increase early next year in Sirius XM’s $12.95-a-month base rate. And he says that he plans to funnel some of that cash to shareholders. (He doesn’t rule out an acquisition but says “they are hard to come by.”) The company says that by year end it will introduce Sirius XM 2.0: It’s built on a new technology that will accommodate additional channels, program time shifting, and replays. The company’s online service also will offer pause and rewind. At least one auto maker will commit to offering Sirius XM 2.0 radios in 2012. About 65% of all new cars come equipped with a satellite radio, and Karmazin says he plans to step up efforts to have dealers install them in used cars. The company also plans to offer a suite of channels for Hispanic audiences. All told, Karmazin says, “we are growing in a very competitive market and a weak economy.”

PREVIOUS, 4:15 AM: The satellite radio company reported 2Q net profits of $173.3M, up from $15.3M in the same period last year, on revenues of $744.4M, up 6.4%. Earnings at 3 cents a share beat the 1 cent consensus among analysts who follow Sirius XM. But they thought that revenues would reach about $752.6M. The company says it had 21M subscribers as of June 30, up 7.6% from a year ago. That was strong enough for CEO Mel Karmazin to say that Sirius XM will add 1.6M customers in 2011, up from 1.4M he had previously projected. Although he says the company will generate about $400M in free cash for the year, an increase from his earlier forecast of $350M, he kept his revenue target at $3B. The financial report follows an FCC decision last week that will allow Sirius XM to raise its rates; the company had agreed in 2008 to freeze them for three years when regulators approved the merger of Sirius and XM. Regulators now say that “there is evidence that new competitive alternatives have arisen since 2008″ including HD Radio and Web-based music services such as Pandora, Spotify, and iheartradio. This morning, Karmazin will talk to analysts about the results — and possibly the status of Howard Stern’s breach of contract suit against Sirius XM.

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