Cox Communications saw the same burst of growth in its advanced services as other cable companies, but nonetheless posting lower income based on debt extinguishment and the sale of some small cable systems.

“This quarter we surpassed a major milestone: three million Cox customers now subscribe to a bundle of two or more services,” said Jim Robbins, president and CEO of Cox Communications, who retires at the end of the year. “Nearly half of our basic subscribers have realized the convenience and value of bundled services.”

The Atlanta-based cable systems operator had net income of $18.3 million on $1.8 billion in revenue, compared with net income of $62.7 million on $1.6 billion in revenue in the second quarter of 2004. That’s a 71% drop.

Total revenues were up 11% to $1.8 billion based largely on growth in advanced services. Cox reported an 11% increase in revenue-generating units to 13.2 million. That number included 12% growth in digital cable to 2.6 million customers; 27% year over year growth in high-speed Internet customers, who now total 2.8 million; and almost 90,000 new Cox Digital Telephone customers to hit 1.3 million, a 33% increase year over year.

Cox had a $13 million dollar pre-tax loss due to debt extinguishment and recorded a $5 million pre-tax loss on the sale of small cable systems in Arkansas, Kansas, Oklahoma and Texas. The company also reported a 10% increase in expenses, including a 10% rise in the cost of programming due to rate increases and a 12% increase in the cost in selling, general and administrative expenses. The company posted a $2.7 million loss on investments.

“The strong quarter also marked our best ever for sell-in of all advanced services and a reduction in churn across all product categories,” Robbins said in a prepared statement. “With all our sales channels focused on increasing the number of bundled customers, we now report 13.2 million RGUs, which translates into higher revenues that fuel greater free cash flow.”