Coxs Story: New Services, Solid Growth2/13/2000 7:00 PM Eastern
Gains in digital cable, high-speed Internet and telephony
helped to drive revenue at Cox Communications Inc. up by 14 percent in the fourth quarter
to $563 million.
Operating cash flow rose 9 percent in the quarter to $220.1
million, and it rose 13 percent for the year to $811.5 million.
Net income dipped 64 percent to $113.1 million (19 cents
per share) versus $317.9 million (57 cents) in the same period a year earlier.
Total new-service revenue-generating units in the quarter
rose 46 percent to 5.7 million from 3.9 million a year ago. Homes passed rose to 8 million
from 5.9 million.
Cox's acquisitions -- $10.9 billion for four MSOs with 2.15
million subscribers -- helped to bump the MSO up to more than 6 million subscribers from
3.7 million at the beginning of the year.
Cable revenue for the quarter rose 8 percent to $509.1
million, primarily on a subscriber gain of 2.6 percent and an 11 percent increase in
Data revenue more than doubled in the quarter to $18.9
million and increased by 155 percent for the year to $56.3 million.
The MSO's digital-cable-customer count hit 265,296 in the
quarter from 74,843 a year earlier. Digital homes passed rose to 4.2 million from 2
million in 1998. Cox's digital-penetration rate rose to 6.2 percent from 3.7 percent a
year earlier and 5.1 percent in the third quarter.
During a conference call with analysts, Cox chief financial
officer Jimmy Hayes said he expected demand for new services to be strong in the company's
new markets, as well.
"If we are able to put more resources at the field
level to accelerate our growth somewhat, I think we'll see some natural running of growth
rates across all three of these products," Hayes said during the conference call.
"Which one we target will vary from market to market."
PaineWebber Inc. vice president of research Thomas Eagan
was impressed by the increase in digital penetration, particularly since the company
offered the service to 8 percent more homes between the third and fourth quarters of 1999.
In a report, Eagan estimated digital installs in the period
at 5,926 per week, up from 5,165 in the third quarter.
Data customers nearly tripled in the period to 186,918 from
67,069 in the same period in 1998. Data homes passed rose to 3.8 million from 2.6 million
a year ago.
Eagan said he expects data subscribers to exceed his
earlier estimate of 234,000 in the first quarter, particularly as cable modems are more
available on the retail level.
Cox had 101,811 telephony customers in the fourth quarter
compared with 27,819 in December 1998. Telephony lines rose to 150,812 from 42,668 in
December 1998, while telephone-ready homes passed rose to 1.2 million from 611,253.