No content for Cox
Cabler stands pat as Q4 revs keep growing
Speaking to analysts Thursday as the company disclosed fourth quarter and full year 2003 earnings, CEO Jim Robbins was unmoved by Comcast's daring bid for Disney, parent company of Cox programming nemesis ESPN. Cox has been waging a bitter battle with the Mouse to contain the sportscaster's carriage fee demands.
Company turned in a healthy revenue gain for the fourth quarter despite swinging to a net loss of $11.3 million from a profit of $179 million in the year-earlier period.
Fanning its reputation as one of the cable business's best-run operations, Cox Communications said it's content to be in the distribution business and may be contemplating expanding its own 6.3 million subscriber footprint. Management indicated that it was interested in additional distribution opportunities, should they become available, rather than content opportunities. Cox is nonetheless a major shareholder in Discovery Networks, an asset potentially worth billions if ever put on the auction block.
Data, sub income jumps
Cox reported big increases in high-speed data and subscription income to produce a 12% revenue gain for the fourth quarter to $1.51 billion. Company's small net loss was chalked up to losses on investments and derivative instruments as well as difficult comparisons over the previous year, which enjoyed an investment gain.
Sales from high-speed services leaped 40% to $238.8 million, while video revenue was up 5.7% to $933.3 million. However, pricing pressure has inspired the company to start tiering its data offering which, along with stepped up promotional spending, fueled a 3.4% decline in average revenue per user.
For the full year, Cox cut 2002's loss by more than half to post a net loss of $137.8 million on total revenues of $5.76 billion, up a hefty 14%.
Company ended 2003 with 6.3 million basic video subs -- virtually flat over 2002's level -- and 2.1 million digital cable subs, a 20% gain over 2002. The growth engine clearly came from data, where Cox now counts nearly 2 million customers, a 41% year-over-year expansion.
Operating cash flow for 2003 was up 19% to $2.12 billion.
Cabler said it's optimistic it can boost revenues by at least 12.5% in 2004, as well as be free cash flow positive for the full year.
Cox is still spending big to push penetration of advanced digital set-top boxes and its Voice over IP telephony services.
