Cox Keeps Up Pace with Solid Sub Growth


Cox Communications Inc. last week reported solid subscriber
gains in the fourth quarter, to go along with steady cash-flow gains and promising early
returns on advanced-services launches.

Atlanta-based Cox emphasized its 2.7 percent internal
subscriber growth (excluding system trades and acquisitions) -- it ended Dec. 31 with 3.2
million basic subscribers -- and the continued rollout of new services in its report.

One analyst said he was encouraged that Cox reported that
early results of telephone-service sales in Omaha, Neb., for example, were about as strong
as phone sales have been in more affluent Orange County, Calif. 'The trend is
bullish,' said Prudential Securities' Melissa Cook.

Cox said operating cash flow in its core cable business
rose 16 percent on a year-to-year basis, to $170.7 million from $146.8 million in the
quarter, but analysts said an accounting change inflated comparisons somewhat. Cook said
the increase would have been about 15 percent without the change.

Operating cash flow in the core video business also rose 16
percent, to $170.3 million, after stripping out satellite and competitive local-exchange
carrier operations and $7.6 million in costs related to telephony and high-speed-data

Cox's net loss in the quarter was $77.9 million, or 29
cents per share of stock, compared with a $57.8 million (21 cents per share) loss in the
fourth quarter of 1996.

Revenue rose 10 percent, Cox said, to $418 million from
$381.6 million in the same period a year ago. Basic-cable revenue rose 9 percent, to
$277.7 million, due to subscriber gains and to an average 6 percent rate increase in the
fourth quarter of 1997. Revenue from PrimeStar Partners L.P. direct-broadcast satellite
operations rose 34 percent, to $32.5 million. Pay-per-view revenue dipped by 12 percent,
to $11.2 million, but the company said the Mike Tyson-Evander Holyfield fight in 1996
inflated the figures for that year.

For the year, Cox's revenue rose 10 percent, to $1.6
billion from $1.46 billion, and cash flow rose 10 percent, to $609.8 million from $556.9
million a year ago. Operating income declined by 7 percent, to $205.3 million from $221.7
million in 1996, because of network-upgrade expenses, Cox said.