raj2001
02-14-03, 10:25 AM
http://news.yahoo.com/news?tmpl=story2&ncid=1212&e=5&u=/nm/20030212/media_nm/cox&sid=95573503
ATLANTA (Reuters) - Cable television operator Cox Communications Inc. Wednesday said it swung to a profit in the fourth quarter from a year-earlier loss as it picked up more customers for its high-speed Internet and digital telephone services.
The company said growth in those services was mainly driven by the success of its bundling strategy that seeks to get customers to subscribe to multiple services.
"We continue to prove that the digital bundle is the industry's growth engine," Chief Executive Jim Robbins said in a statement. Cox had 1.7 million bundled customers at the end of 2002, up 53 percent from a year earlier, he said.
Analysts said the fourth-quarter results were generally in line with expectations, although basic subscriber growth of 1 percent and new cable-modem subscriptions slightly trailed some estimates.
Drake Johnstone, a Davenport & Co. cable analyst, said Cox was doing far better than most other cable companies.
"They've got one of the most upgraded networks in the country, which means they're able to offer these advanced services to a greater portion of their customer base than most cable companies," he said.
Cox last year decided to invest more in its telephone and broadband business to focus on services with higher profit margins. Those businesses helped fourth-quarter results.
Cox had 1.4 million high-speed Internet customers at year-end, including 135,650 added in the fourth quarter, for year-over-year growth of 59 percent. The company said a $5 rate increase in some markets last year had no noticeable effect on penetration rates.
Cox picked up more than 67,000 digital telephone subscribers in the fourth quarter, achieving annual customer growth of 58 percent for that business.
Still, Cox cited challenges over the next year, including competition, rising programming costs and a lackluster economy.
PROGRAMMING COSTS
Robbins told a conference call that Cox was in "serious discussions" with suppliers to crack down on higher programming costs that it blames for cable-TV rate increases.
"If we had not been aggressive in the Internet business and the telephone business, our growth numbers would not be what they are," Robbins said.
In the basic video business, most of the benefit is going to programmers, he said.
Cox said it generated $85.6 million in quarterly free cash flow, which is money a company generates from operations after deducting capital expenditures.
Cox reiterated that it expects to be free cash flow positive for all of 2003. It also said revenue and operating cash flow will rise 14 percent to 15 percent this year, while capital spending drops to $1.6 billion from $1.9 billion in 2002.
Cox had 6.3 million subscribers to its basic video service at the end of 2002 and expects the total to grow 1 percent this year. Johnstone said many other cable firms are seeing declines in basic cable subscribers.
Cox had fourth-quarter net income of $179.6 million, or 28 cents a share, compared with a loss of $105.2 million, or 18 cents a share, a year earlier.
The latest results included a $255.2 million pretax gain related to certain investments.
Operating cash flow increased 73 percent to $491.9 million. Cable company analysts consider operating cash flow a key indicator of performance because it excludes depreciation, amortization and other costs associated with acquisitions and system upgrades.
Fourth-quarter revenue rose 18 percent to $1.3 billion.
Cox shares fell in early New York Stock Exchange trading but later rebounded and were up 31 cents to $27.51 in the early afternoon. Other cable stocks fell, with Comcast Corp. off 23 cents at $25.06 and Cablevision Systems Corp. down 18 cents at $16.57. Reuters/Variety
ATLANTA (Reuters) - Cable television operator Cox Communications Inc. Wednesday said it swung to a profit in the fourth quarter from a year-earlier loss as it picked up more customers for its high-speed Internet and digital telephone services.
The company said growth in those services was mainly driven by the success of its bundling strategy that seeks to get customers to subscribe to multiple services.
"We continue to prove that the digital bundle is the industry's growth engine," Chief Executive Jim Robbins said in a statement. Cox had 1.7 million bundled customers at the end of 2002, up 53 percent from a year earlier, he said.
Analysts said the fourth-quarter results were generally in line with expectations, although basic subscriber growth of 1 percent and new cable-modem subscriptions slightly trailed some estimates.
Drake Johnstone, a Davenport & Co. cable analyst, said Cox was doing far better than most other cable companies.
"They've got one of the most upgraded networks in the country, which means they're able to offer these advanced services to a greater portion of their customer base than most cable companies," he said.
Cox last year decided to invest more in its telephone and broadband business to focus on services with higher profit margins. Those businesses helped fourth-quarter results.
Cox had 1.4 million high-speed Internet customers at year-end, including 135,650 added in the fourth quarter, for year-over-year growth of 59 percent. The company said a $5 rate increase in some markets last year had no noticeable effect on penetration rates.
Cox picked up more than 67,000 digital telephone subscribers in the fourth quarter, achieving annual customer growth of 58 percent for that business.
Still, Cox cited challenges over the next year, including competition, rising programming costs and a lackluster economy.
PROGRAMMING COSTS
Robbins told a conference call that Cox was in "serious discussions" with suppliers to crack down on higher programming costs that it blames for cable-TV rate increases.
"If we had not been aggressive in the Internet business and the telephone business, our growth numbers would not be what they are," Robbins said.
In the basic video business, most of the benefit is going to programmers, he said.
Cox said it generated $85.6 million in quarterly free cash flow, which is money a company generates from operations after deducting capital expenditures.
Cox reiterated that it expects to be free cash flow positive for all of 2003. It also said revenue and operating cash flow will rise 14 percent to 15 percent this year, while capital spending drops to $1.6 billion from $1.9 billion in 2002.
Cox had 6.3 million subscribers to its basic video service at the end of 2002 and expects the total to grow 1 percent this year. Johnstone said many other cable firms are seeing declines in basic cable subscribers.
Cox had fourth-quarter net income of $179.6 million, or 28 cents a share, compared with a loss of $105.2 million, or 18 cents a share, a year earlier.
The latest results included a $255.2 million pretax gain related to certain investments.
Operating cash flow increased 73 percent to $491.9 million. Cable company analysts consider operating cash flow a key indicator of performance because it excludes depreciation, amortization and other costs associated with acquisitions and system upgrades.
Fourth-quarter revenue rose 18 percent to $1.3 billion.
Cox shares fell in early New York Stock Exchange trading but later rebounded and were up 31 cents to $27.51 in the early afternoon. Other cable stocks fell, with Comcast Corp. off 23 cents at $25.06 and Cablevision Systems Corp. down 18 cents at $16.57. Reuters/Variety