Strong growth in telephony and high-speed data helped to push Cox
Communications Inc.'s first-quarter operating cash flow up 10 percent even as
digital-cable growth slowed.
Revenue at Cox was up 12 percent to $947.9 million. Operating cash flow was
$358 million for the period.
Big gains in telephony (the MSO added about 48,000 new customers to finish
with 293,000) and high-speed data (another 105,000 additions, ending with
587,000) helped to drive the growth.
Penetration rates for telephony in the period were at 11 percent, with some
markets like Orange County, Calif., approaching 40 percent.
Based on that strong growth -- new-revenue-generating units rose by 271,000
to 1.8 million in the period -- Cox president Jim Robbins said the company was
on track to meet its goal of 11 percent to 12 percent cash-flow growth in the
Cox's bundling strategy also seems to be paying off, with 750,000 customers
taking at least two Cox products at the end of the period.
Digital-cable growth, however, slowed slightly in the period. Cox ended the
quarter with 961,000 digital subscribers, up by 119,000. That growth was
slightly lower than in the fourth quarter, when the company added some 159,000
Cox said the slowdown in growth was due mainly to seasonal disconnects -- it
held off canceling service for nonpayment during the December holidays -- and it
should be back on track in future quarters.
Cox also said it is moving forward with a plan to renegotiate its deal with
AT&T Corp. regarding its agreement last year to exchange its put rights in
high-speed-data provider Excite@Home Corp. for AT&T stock worth about $1
In a press release, Cox said the renegotiation 'may or may not result in a
change to the number of shares of AT&T stock Cox will receive, as well as
the number of Excite@Home shares, if any, Cox transfers to AT&T.'
AT&T had said earlier in the month that it was renegotiating the
Excite@Home deal with both Cox and Comcast Corp. An AT&T spokeswoman said
those negotiations are ongoing.
Cox also said in the release that it put its interest in Speedvision and
Outdoor Life Network to Fox Cable Networks Group in March, and it expects to
close that deal in the third quarter.