By Liana B. Baker

NEW YORK (Reuters) - Sirius XM Radio reported a higher-than-expected quarterly profit as more customers hung onto their satellite radio subscriptions after promotions ended, but it had little news of Howard Stern's contract talks.

"We do not have any update today, other than to say discussions continue," chief executive Mel Karmazin said during a conference call on Thursday.

Radio shock-jock Stern's five-year, $500 million contract with Sirius XM Radio expires in December and investors have expressed concern that subscribers would abandon the service if Stern were to move on.

"That's the big elephant in the room," said Lazard Capital Markets analyst Barton Crockett.

Karmazin called Stern a "great partner," but said Sirius XM attracts subscribers "every day because of the content we have on our 130-plus channels" and not just because of Stern.

Sirius XM is also home to programing by Oprah Winfrey.

Karmazin said that recovering auto sales would be a benefit to Sirius XM, which tallies many new subscriptions from buyers of new cars that have the radios installed.

SOLID RESULTS

Excluding items, the satellite radio company posted a third-quarter profit of 2 cents a share, which beat analysts' estimates for the company to break even.

This is Sirius' fourth straight quarter of profit as it steadily adds subscribers and distances itself from years of huge losses and questions about its business model. It said it had 19.8 million subscribers in the third-quarter.

Net income was $67.6 million, up from a loss of $151.5 million a year earlier.

The company earned total adjusted revenue of $722.5 million in the quarter, up 15 percent from a year ago, and beating analysts expectations of about $719 million.

Sirius XM spent less on acquiring subscribers during the quarter, which Lazard Capital Markets analyst Barton Crockett said provided a "huge upside surprise."

The subscriber acquisition cost fell 14 percent to $59, from $69 last year. "They spent a lot less on subscriber additions, which means they are making more money," Crockett said.

Sirius XM has also shown it can get customers to commit to its service after its starter promotions end.

The conversion rate of trial subscribers who became full paying subscribers climbed to 48.1 percent in the third quarter of 2010, up from 46.2 percent a year earlier.

Sirius XM maintained its full-year revenue outlook of $2.8 billion.

(Reporting by Liana B. Baker, editing by Dave Zimmerman and Maureen Bavdek)