AirTouch Profit Up 34% on Wireless Gains
AirTouch Communications Inc. said Thursday its profit jumped a better-than-expected 34% in the fourth quarter as it added a record 1.5 million new customers for its wireless services.
The nation’s largest cellular company, which is set to be acquired by Britain’s Vodafone Group for $68.2 billion, posted net income of $130 million, or 22 cents a share, up from $97 million, or 19 cents, a year ago. Sales soared 55% to $1.45 billion.
The performance beat the average estimate of 18 cents from analysts polled by First Call Corp. Estimates ranged from 15 cents to 23 cents.
The company said it expects demand worldwide to remain strong, though increasing competition could slow growth in some markets. It also plans to boost capital spending to beef up its networks to support the rise in customers.
Of the new customers AirTouch added in the quarter, about 454,000 were in the U.S.
Lower prices for cellular phones as well as spreading fixed costs across a wider customer base helped the company boost its cash-flow margin in the U.S. Average revenue per customer fell 8% in the U.S. It was the first quarter average revenue has fallen less than 10% since 1995. Including international properties, average revenue per customer fell 17%.
Chief Executive Sam Ginn said the company expects average revenue to fall further, though at a slower rate than previous forecasts.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
HOTELS & GAMING
* Hilton Hotels Corp. reported flat profit in the fourth quarter of $57 million, or 21 cents a share, as rising debt costs offset higher room prices at its biggest hotels. The results, which exclude Hilton’s spun-off casino business and charges, were a penny higher than the 20-cent average estimate in a survey of six analysts by First Call Corp.
Revenue rose 28% to $496 million, with double-digit gains at most of Hilton’s “Top 10” luxury hotels--those in urban areas such as New York and San Francisco where there is little new construction. Hilton boosted room prices an average 7.4% in the quarter.
Chief Executive Stephen Bollenbach said Hilton expects to spend about $500 million acquiring hotels this year and is likely to announce two transactions within the next four weeks.
He declined to comment on speculation that Hilton was in talks to acquire a group of hotels, including long-term specialists Summerfield Suites, from Patriot American Hospitality Inc.
Company executives also outlined a long-term plan to enter the extended-stay lodging market with the development of a line of hotels to be called Hilton Residential Suites.
* MGM Grand Inc. said its earnings fell a less-than-expected 28% in the fourth quarter to $21.2 million, or 41 cents a share. Analysts had forecast 35 cents. Net revenue rose 1% to $214.9 million from strength at its casinos and an emphasis on food and drink sales at its flagship resort, the MGM Grand hotel in Las Vegas.
CONSUMER PRODUCTS
* Avon Products Inc.’s profit grew 27% in the fourth quarter to $148.1 million, or 56 cents a share, a penny better than forecasts, as it cut costs and boosted sales in the U.S., Brazil and Europe. Revenue at the direct seller of cosmetics and beauty products grew 2.1%. Avon also said it expects to top analysts’ forecasts this year even with economic turmoil in Brazil, Latin America’s biggest economy.
* Colgate-Palmolive Co. said its net income rose 13% to $234.2 million, or 73 cents a share, a penny higher than estimates, as demand for new products in North America and cost-cutting more than offset sluggish sales in Russia and Asia. Colgate, whose products include Softsoap and Speed Stick deodorant as well as Colgate and other toothpastes, said revenue edged down 0.9% to $2.29 billion.
* Hasbro Inc.’s profit rose 18% in the fourth quarter to $131.8 million, or 98 cents a share, beating estimates of 94 cents. Revenue jumped 15% to $1.3 billion, led by Tiger Electronics, which makes Furby, one of the holiday’s best-selling toys, and computer-based games.
* Maytag Corp.’s fourth-quarter earnings grew a better-than-expected 33% to $68.8 million, or 75 cents a share, well above estimates of 71 cents. Sales rose 2.8% to $972 million, getting a boost from the high-profit Neptune washing machine, Hoover vacuum cleaners and strong commercial appliance sales.
* Quaker Oats Co.’s earnings jumped 42% in the fourth quarter to $45 million, or 30 cents a share, a penny higher than estimates, mostly from cost-cutting. Sales fell 8.1% to $963.3 million. Hot cereal sales fell 15%, but were offset by a 16% rise in unit sales of Gatorade.
ENTERTAINMENT
* USA Networks Inc. said its fourth-quarter loss narrowed to $12 million, or 3 cents a share, compared with a loss of $21.2 million, or 15 cents, a year ago. Revenue grew 7.8% to $767.1 million amid higher ad revenue at its cable-TV networks and stronger sales at its electronic-retailing business, including Home Shopping Network. The latest results exclude a gain of $63 million from the sale of about 11% of its stake in Ticketmaster through its initial public offering.
