Hilton’s Net Income Soars
Hilton Hotels Corp. said Wednesday that second-quarter profit more than doubled, boosted by hotel sales and higher room rates in key destinations including New York, Hawaii and Boston.
Net income at the third-largest U.S. hotel chain rose to $202 million, or 49 cents a share, from $75 million, or 19 cents, a year earlier as revenue rose 10% to $1.18 billion.
Excluding proceeds of hotel sales and a tax gain, earnings were 27 cents a share, topping the average analyst estimate of 24 cents a share, according to Reuters Estimates.
The company raised its 2005 room revenue and profit targets for the second time this year.
“Rates in New York City are still below the peak we had in 2000. In terms of earnings, we still have a ways to go,” said Matthew Hart, Hilton’s president and chief operating officer.
Beverly Hills-based Hilton also operates hotels under the Hampton Inn and Embassy Suites brands.
“Hilton had an outstanding quarter, driven by continued improvement of fundamentals in the lodging industry,” Deutsche Bank analyst Marc Falcone said.
“And Chicago finally turned the corner,” he added, referring to a market that has lagged behind the overall industry recovery. Hilton has several hotels in Chicago.
Hilton said profit margins at company-owned hotels rose 1.6 percentage points to 32.1% but were hurt by weakness in San Francisco, where a labor-led boycott has affected business.
“San Francisco was the only blemish on an otherwise straight-A report card,” Hart said.
Hilton shares fell 23 cents to $24.17.
Hilton raised its 2005 earnings forecast to $1.05 to $1.07 a share from its previous forecast of 78 cents to 80 cents.
Excluding one-time items, it expects 82 cents to 84 cents a share for the year. Hilton expects 2005 revenue to be $4.44 billion to $4.46 billion.
Also
* McKesson Corp., the biggest U.S. drug distributor, said fiscal first-quarter profit rose 4.3% on sales to new customers. Net income climbed to $171 million, or 55 cents a share, from $164 million, or 55 cents, a year earlier, San Francisco-based McKesson said. Revenue rose 9.7% to $21.05 billion.
* San Diego defense contractor Titan Corp. said its second-quarter loss narrowed as increased sales helped offset charges to settle a shareholder lawsuit and costs related to its pending acquisition by L-3 Communications Holdings Inc. Its quarterly loss was $44.1 million, or 52 cents a share, compared with $66.6 million, or 79 cents, a year earlier. Sales rose 21% to $620 million.
* Allergan Inc., the maker of the Botox anti-wrinkle treatment, said second-quarter profit fell 64% because of costs to end an agreement with a former subsidiary and combine some European operations. Net income fell to $33.4 million, or 25 cents a share, from $91.8 million, or 68 cents, a year earlier, the Irvine company said. Sales rose 17% to $591 million.
* Skechers USA Inc., the Manhattan Beach-based global footwear company, posted second-quarter earnings of $15.9 million, or 38 cents a share, up 92% from $8.3 million, or 21 cents, a year earlier. The company, citing double-digit sales growth in its domestic wholesale and retail businesses, said sales rose 12% to $263.9 million.
* Automotive wheel maker Superior Industries International Inc. said second-quarter profit fell 64% as General Motors Corp. and Ford Motor Co. built fewer cars and trucks. Net income declined to $4.85 million, or 18 cents a share, from $13.6 million, or 51 cents, a year earlier, the Van Nuys company said. Revenue dropped 3.1% to $226.5 million.
* First American Corp. of Santa Ana said net income rose 20% to $139.5 million, or $1.43 a share, from $116.5 million, or $1.27, a year ago. Revenue rose 15% to $1.98 billion.
* Disk drive maker Maxtor Corp. said it earned $9.44 million in the second quarter after a year-earlier loss as sales rose and the company cut jobs and moved factories to reduce costs. It was Maxtor’s first profit in five quarters. Net income was 4 cents a share, contrasted with a net loss of $26.5 million, or 11 cents a share, a year earlier, the Milpitas, Calif., company said. Sales increased 13% to $924.7 million.
* Corona-based Watson Pharmaceuticals Inc., a leading specialty pharmaceutical company, said second-quarter profit rose 17% on higher sales of branded and generic drugs. Net income climbed to $40.9 million, or 35 cents a share, from $34.9 million, or 29 cents, a year earlier. Revenue increased 4% to $416.3 million from $399.4 million a year earlier.
