A solid performance at Cox Communications ( COX) wasn't enough to dissuade investors from another round of cable-stock selling Monday. Cox posted a 16% jump in revenue Monday, swinging to a first-quarter loss from the year-ago period's derivatives-gain-fueled profit. The company said operating cash flow jumped 19% from a year earlier as marketing costs slipped. But Cox's shares, which along with other cable stocks suffered a
sharp selloff Friday following a steady rise over the past few months , continued their skid Monday, dropping $1.86, or 5.8%, to $30.19. The stock of Comcast ( CMCSA), the nation's No. 1 cable operator, slid $1.09, or 3.6%, to $29.40, amid worries that an industrywide price war is looming over broadband Internet service. For its first quarter, Cox lost $29.2 million, or 5 cents a share, compared with earnings of $135.6 million, or 22 cents a share, last year. The year-ago quarter included a $720 million gain from derivatives and a $409 million pretax loss from investments, items that were largely absent from the most recent quarter. Operating income, which Cox defines as total revenue minus total costs and expenses minus depreciation and amortization, rose 44% to $95.1 million. Total revenue was $1.37 billion in the latest quarter, up 16% from last year because of increased customers for services such as digital cable, high-speed Internet access and telephony, higher basic cable rates and a $5 price increase on high-speed Internet access in certain markets. Analysts were generally positive about the company's performance, citing the company's 19% increase to $479.5 million in operating cash flow, or earnings before interest, taxes, depreciation and amortization. The EBITDA improvement stemmed from both higher-than-expected revenue and lower-than-expected marketing expenses, some of which are being recognized in other quarters. Subscriber additions for high-speed Internet service also came in above analysts' forecasts, partly clouding newly revived concerns of a price war among high speed Internet service providers . "We ... added 154,000 high-speed Internet and 64,000 telephone customers in the first quarter, and penetration of digital cable to basic customers is nearing 30%, demonstrating unabated demand for Cox's digital service bundle," the company said in a release. Looking ahead, Cox expects revenue to rise 14% or 15% in 2003, operating cash flow to rise 15% to 16%, and capital expenditures to be about $1.6 billion.