Just months away from becoming a private company, Cox Communications Inc. reported mixed third-quarter results, with strong high-speed-data and basic-subscriber growth but reduced 2004 cash-flow guidance to the lower end of the expected range.
Revenue rose 11% to $1.62 billion and pro forma cash flow was up 12.5% to $611 million, excluding a $26.6 million charge for hurricane-related expenses.
The Atlanta-based MSO revised its year-end cash-flow target to the lower end of the 14%-15% range previously predicted. Cox also revised its basic-subscriber-growth target from just under 1% to 0.3%.
In a prepared statement, Cox said operating-cash-flow growth will be impacted by costs associated with recent hurricanes in Florida and Louisiana -- estimated at about $5 million after insurance -- and a litigation judgment tied to TCA Cable TV Inc.’s purchase of three cable systems prior to Cox’s purchase of TCA in 1999.
On Oct. 15, a Texas court awarded a charitable foundation that owned some of the systems included in that TCA sale about $22 million. Cox is appealing the verdict.
Cox added 18,000 basic subscribers in the period, down from 30,000 in the same quarter last year. Digital subscribers rose by 73,000, down from 121,000 in 2003, and high-speed-data customers increased by 184,000 customers, or 14,200 per week, double the additions in the previous quarter. Cox also added 83,000 digital-telephone customers, its highest single-quarter addition ever.
Cox said earlier this month that it had accepted a proposal from its parent, Cox Enterprises Inc., to purchase the remaining 38% of Cox Communications stock CEI didn’t own at $34.75 per share. That deal is expected to close in mid-December, making Cox Communications a privately held company.