Cox sees cash flow growth this year

Greg Wiles

Tuesday, Jan. 12, 1999 | 9:58 a.m.

ATLANTA -- Cox Communications Inc., the fifth-largest U.S. cable-television operator, forecast that its operating cash flow will grow by 8 percent to 10 percent this year as it adds customers for Internet, telephone and digital cable services.

Atlanta-based Cox estimated it will add 450,000 to 500,000 subscriptions for the new residential services by the end of the year. It said it had about 160,000 subscriptions for new services at the end 1998.

Cox controls the main Las Vegas cable system. Members of the Greenspun family hold a minority position in the Las Vegas Cox cable system and separately control the Las Vegas Sun.

Cable companies expect to generate more revenue from new services such as Internet access and telephone service as they complete upgrades of cable equipment. Cox measures the growth of new services by "revenue generating units," meaning a customer buying three of the new services would account for three subscription units.

"We anticipate healthy growth for new services in the coming year, as we launch services in additional markets and expand the footprint in existing markets for telephone and high-speed Internet services," Jimmy Hayes, senior vice president of finance and chief financial officer, said in a statement.

Cox revealed its forecast at the Salomon Smith Barney Global Entertainment, Media and Telecommunications Conference in Scottsdale, Ariz.

The projected growth in operating cash flow -- or earnings before interest, taxes, depreciation and amortization -- would follow pro-forma operating cash flow growth of 8 percent to 9 percent in 1998. Cox didn't provide exact 1998 year-end financial results for comparison and expects to release earnings Feb. 17.

The company said it expects 11 percent to 14 percent growth in pro-forma revenue compared with last year, when it had 10 percent to 11 percent pro-forma revenue growth. Basic cable subscribers are forecast to rise by 2 percent to 2.5 percent from its current 3.8 million subscribers.

Cox shares rose 1 to 70 3/4.