US cable operator Cox Communications reported an 83% drop in Q3 net income, hurt by weak ad revenues and the aftermath of September 11, both of which president/chief executive Jim Robbins warned would continue to affect the company in the fourth quarter.
“Advertising sales have been slow all year due to the uncertain economy,” he said, adding that last month’s devastation “contributed further to this issue”
Net income fell from $838 million in Q3 last year to $143m. However, all is not doom and gloom – excluding items, Cox posted a loss of $93m, the same as last year, while revenue jumped 14% to $1.03 billion on the back of healthy sales of digital television, broadband internet access and cable telephone services. In addition, operating cash flow surged 12% to $396.3m.
Separately, the group’s biggest stockholder, Cox Enterprises, announced it is selling 13.5m out of 400m shares in the cable firm to a pair of private investors. According to analysts, the sale, worth around $550m, may have been prompted by the need to prop up Cox Enterprises’ more ad-dependent newspaper and radio properties.
News source: Wall Street Journal