Cox to go it alone
Topper rips merger talk, touts growth, digital
The bid for AT&T, which was subsequently pledged to larger rival Comcast, was based on a unique set of circumstances, including a complementary subscriber base in large, lucrative urban markets, Robbins said during Cox's 2001 earnings call.
"There simply aren't any properties out there anymore that worked as well with us as AT&T Broadband, so we have no urgency to participate in any consolidation."
Reduction in benefits
Comcast has touted its $72 billion AT&T pact as a means to trim redundant costs, as well as gain more leverage when negotiating deals with programmers. But Robbins claimed that Cox's research into a similar deal with AT&T revealed that the benefits "were not anywhere near where we thought they were initially."
Cox's 2001 results, coupled with bullish guidance for the coming year, reassured investors that the company can perform on its own. Cabler posted revenue growth of 14% for the year and the fourth quarter of 2001, driven by the expansion of digital cable and broadband Internet.
The company also painted a cheery picture for 2002, predicting revenue growth of between 14% and 15%. Cash flow -- considered a financial touchstone for media companies -- is seen growing 13%-14%, compared with 12% in 2001.
Results were all the more encouraging to investors amid a backdrop of slowing growth for Cox's rivals in 2002. Forecasts of slowing growth by Charter Communications, which reported Monday, and Comcast have sparked concerns on Wall Street about the entire sector.
"The growth we have seen across the industry to date has been mainly low-hanging fruit," said Robbins. "But the industry is about to be tested."
Exec said Cox will pass the test, in part because it has been quick to upgrade its network to roll out more profitable digital services.
Share-ing enthusiasm
Investors gave Robbins' strategy some approval Tuesday, nudging the stock up 0.2% to $35.25 in an otherwise negative market. Cox shares have tumbled 15% since the beginning of the year amid growth worries about the industry.
The news wasn't quite as rosy on Cox's bottom line. The company's net losses widened by 54% to $110 million in the fourth quarter and net income for all of 2001 slipped 61% to $750 million.
Both numbers were impacted by a $156 million one-time charge stemming from the migration of Cox high-speed Internet customers off the bankrupt Excite@Home network. Comcast reported a similar charge last week.
