Operating losses widen for Vegas communications companies

Wednesday, Nov. 1, 2000 | 10:06 a.m.

SUN STAFF AND WIRE SERVICES

Cox Communications Inc. of Atlanta, operator of the main cable television system in Las Vegas, today said its third-quarter loss widened as it spent more to upgrade its cable lines for new products such as fast Internet service.

Cox's loss from operations widened to $60 million or 10 cents a share from $24 million or 4 cents in the year-ago period, said Assistant Treasurer Mark Major. Sales rose 53 percent to $902.2 million, boosted by acquisitions.

Analysts had expected a loss from operations of 7 cents for Cox, the nation's fifth-largest cable TV company.

Cash flow, or earnings before interest, taxes, depreciation and amortization, rose 57 percent to $354.1 million.

Investment gains on companies including Sprint PCS and At Home Corp. totaled $1.25 billion before taxes in the quarter, giving Cox a quarterly profit of $838.1 million or $1.37 per share. In the year-ago quarter, investment gains of $59.5 million pretax helped produce net income of $11.9 million or 2 cents.

Sales and cash flow were less than analysts' estimates. The company spent more to introduce new services and absorb about $10 billion of cable acquisitions made last year. But Cox added more customers than forecast for digital TV and high-speed Internet service.

The Greenspun family, owner of the Las Vegas Sun, holds a minority interest in the Cox cable system in Las Vegas.

Separately, Las Vegas-area business telecommunications services provider XO Communications Inc. of Reston, Va., reported a loss of $436.5 million or $1.20 per share on revenues of $224.3 million for its third quarter.

The company said an increase in sales of data services resulted in a 59 percent increase over revenue reported in the second quarter and 199 percent more than the $75.1 million reported for the same quarter a year earlier.

XO lost $159.1 million or 63 cents per share in the third quarter of 1999.

The 2000 third-quarter loss was less than the $1.27 projected by a consensus of analysts.

XO manages 32 broadband, local telephone networks in 51 cities, including the Henderson-based Las Vegas market operation. The company, formerly known as Nextlink, focuses on business customers in Las Vegas.

The managing partner, XO Communications, is a 40 percent owner of the Las Vegas network. Minority stakes in the Las Vegas system are held by Cox Communications, Star Communications, Dallas, and the Greenspun family.