Busier Hotels Boost Hilton’s Profit

Hilton Hotels Corp. said Thursday that its third-quarter profit rose 2.4% and cash flow increased as the fifth-largest U.S. hotel company benefited from higher occupancy rates and recent acquisitions.

Beverly Hills-based Hilton said diluted earnings--excluding charges associated primarily with the opening of a new hotel at Boston’s Logan Airport--climbed to 17 cents, compared with 15 cents in the third quarter of 1998. The latest results matched the consensus forecast of analysts surveyed by First Call/Thomson Financial.

Profit from continuing operations, including the costs for the Boston hotel, rose to $42 million, or 16 cents a share, from $41 million, or 15 cents, in the 1998 third quarter. Revenue rose 10.6% to $498 million from $450 million.

Hilton shares rose 31 cents to close at $9.38 on the New York Stock Exchange.

Under Chief Executive Stephen Bollenbach, Hilton has acquired several new hotels, including a planned $2.7-billion purchase of Promus Hotel Corp., which is expected to close next month. The acquisition would give Hilton such brand names as Doubletree and Embassy Suites, and would put the company in a better position to compete against Marriott International Inc. and Starwood Hotels & Resorts Worldwide Inc.

Excluding properties in Hawaii, occupancy rates increased to 78.2% from 77.8% in the year-ago period. Revenue per available room increased 4.6%.

Hilton spun off its casino business into a new company, forming Park Place Entertainment Corp., in December.

Cash flow, or earnings before interest, taxes, depreciation, amortization and pre-opening expenses, rose 7% to $161 million from $150 million. Cash flow is considered an important measure of hotel companies because it reflects how their properties are performing, excluding the large charges the companies take for debt payments and depreciation of real estate, analysts say.

At a Glance

Other earnings, excluding one-time gains and charges unless noted:

* Santa Barbara-based apparel maker and retailer Big Dog Holdings Inc. reported higher earnings but saw a decline in same-store sales during the third quarter. The company also announced it has hired investment banker Deutsche Banc Alex. Brown to explore options for increasing shareholder value, including a possible merger or restructuring.

For the period ended Sept. 30, net income rose to $2.9 million, or 24 cents a share, compared with $2.4 million, or 20 cents, a year ago. Revenue rose to $29.6 million from $28.4 million. Same-store sales declined 3.7%, which the maker of casual clothing attributed to a cooler West Coast summer and summer rains on the East Coast. Big Dog operates 185 stores.

* Authentic Fitness Corp., the Los Angeles-based maker of Speedo swimwear, reported a fiscal first-quarter net loss of $5.2 million, or 26 cents a share, compared with a net loss of $10.1 million, or 46 cents, a year ago. Revenue rose 11% to $43.9 million from $39.6 million.

Authentic is considering a $525-million acquisition bid from Warnaco Group Inc., a maker of Calvin Klein apparel. The companies share the same chief executive, Linda Wachner, who is also Authentic’s second-biggest shareholder.

* FirstFed Financial Corp., the Santa Monica-based parent of First Federal Bank of California, reported third-quarter net income of $8.4 million, or 44 cents a share, compared with $8.8 million, or 41 cents, a year ago. Net interest income rose to $24.2 million from $23.2 million.

* Los Angeles-based Align-Rite International Inc., a maker of precision photomasks for semiconductor manufacturing, reported fiscal second-quarter net income of $965,000, or 20 cents a share, compared with $1.8 million, or 37 cents, a year ago. Revenue increased 11% to $15.6 million from $14 million. The company attributed the earnings decline to “a short-term softness” in demand and certain factory start-up expenses.

* Los Angeles-based Sports Club Co. reported third-quarter net income of $153,000, or 1 cent a share, compared with $1.8 million, or 9 cents, a year ago before the company bought back shares. Revenue rose to $22.7 million from $20.7 million.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Earnings Reports

A sampling of companies reporting quarterly earnings Thursday and expected to report today, ranked by year-over-year earnings-per-share (EPS) growth, compiled by First Call/Thomson Financial.

Reporting Thursday

*--*

Analysts’ Pct. above/ Year- Ticker estimated Actual below ago Company symbol EPS EPS estimate qtr. Apache APA $0.53 $0.59 11% $0.03 Kerr-McGee KMG 1.16 1.20 3 0.3 St. Paul Cos. SPC 0.61 0.64 5 0.19 Phillips Petroleum P 0.72 0.87 21 0.27 Network Solutions NSOL 0.18 0.21 17 0.09 CSX CSX 0.44 0.58 32 0.37 American General AGC 1.16 1.16 0 0.98 Open Text OTEX 0.13 0.13 0 0.11 El Paso Energy EPG 0.48 0.50 4 0.43 Pharmacia & Upjohn PNU 0.47 0.47 0 0.41 American Int’l. Group AIG 0.80 0.79 -1 0.7 Sempra Energy SRE 0.45 0.45 0 0.4 Procter & Gamble PG 0.88 0.88 0 0.8 Donnelley (R.R.) DNY 0.69 0.67 -3 0.61 Milacron MZ 0.47 0.47 0 0.47 GPU GPU 1.07 1.18 10 1.19 BF Goodrich GR 0.73 0.74 1 0.76 Clorox CLX 0.36 0.37 3 0.42 Infospace.com INSP -0.03 0.02 -167 -0.03 CBS CBS 0.04 0.05 25 0.00 Marketwatch.com MKTW -0.64 -0.50 NM -0.40 Verio VRIO -0.68 -0.61 NM -0.52 IXL Enterprises IIXL -0.35 -0.20 NM -1.16 TheStreet.com TSCM -0.32 -0.29 NM -0.33 The Globe.com TGLO -0.34 -0.29 NM -0.32

Year- over-year Company % change Apache +1867% Kerr-McGee +300 St. Paul Cos. +237 Phillips Petroleum +222 Network Solutions +133 CSX +57 American General +18 Open Text +18 El Paso Energy +16 Pharmacia & Upjohn +15 American Int’l. Group +13 Sempra Energy +13 Procter & Gamble +10 Donnelley (R.R.) +10 Milacron 0 GPU -1 BF Goodrich -3 Clorox -12 Infospace.com NM CBS NM Marketwatch.com NM Verio NM IXL Enterprises NM TheStreet.com NM The Globe.com NM

*--*

Expected Today

*--*

Ticker Analysts’ Year-ago Predicted Company symbol estimated EPS quarter pct. chg. Lockheed Martin LMT $0.47 $0.84 -44%

*--*

Notes: NA = not available NM = not meaningful. A loss in any period makes percentage change not calculable. Year-over-year growth and percentage changes are based on earnings-per-share figures and may differ from percentage changes based on total profit. For more information on First Call, check https://www.firstcall.com.