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First Look Saw Weak Cox HSI ARPU

Cox Communications Inc. released fourth-quarter earnings last Thursday.

At deadline, first-look flash reports spotted a sequential decline of about $1.47 in average revenue per unit from high-speed Internet sales.

Citigroup Smith Barney analyst Niraj Gupta called the weakness "easily explained": more people are buying modems, not renting them; there's less revenue coming from installations as self-installs rise; and more of Cox's bundling discount is getting applied to the modem part of the bundle.

Still, Gupta correctly said Cox would suffer some selling early Thursday, and said "we would be buyers of Cox shares." His price target: $40. Other metrics were in line or better than expected, Gupta said.