Cabler Cox locks up big 2Q gains

Revs up 14% year over year to $1.4 bil, but subs down

Atlanta-based cabler Cox Communications on Wednesday reported huge operating cash flows of $532 million for the second quarter, keeping up its reputation for running one of the tightest ships in the cable biz. Results represent a 20% jump over last year off revenues up 14% year over year to $1.4 billion.

Thanks in part to a hefty 32% reduction in capital spending on its cable systems over last year, Cox even produced $125.8 million in free cash flow, a rarity among cable ops.

With a strategy focused on bundling video, data and voice services, the country’s fourth largest multiple system operator benefits from one of the highest digital penetration rates in the country. Some 98% of the homes in its franchise are upgraded and 30% of its customers take a digital package.

Lost basic cable subs

Still, in a seasonally sluggish quarter, Cox lost 37,000 basic cable subs while its digital cable additions of 69,000 marked a 32% decrease over the same quarter last year. Company also added 112,000 high-speed data subscribers, in line with expectations but still a slight decline over last year’s gains in the same period.

Company says it expects to add at least 1 million new customers overall in 2003. It ended the quarter with 6.5 million total subscribing homes. Part of the slowdown in new subscribers may be due to reduced marketing spend.

Programming costs rose 10% over last year to $291.5 million, reflecting rate increases by networks and additional subscribers.

Notably, company swung to a net profit of $117.7 million for the three months ended June 30 compared with a loss of $516 million in the same quarter last year. Company benefited from a one-time gain of $97 million from selling its minority stake in SprintPCS.

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