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Profit Falls at Hilton; Times Mirror Gains

Hotel Chain's Net Income Dips 16% on Asian Woes

October 21, 1998|From Bloomberg News

Hilton Hotels Corp. said Tuesday that third-quarter profit fell 16% as the recession in Asia hurt two of its biggest hotels and it won less than usual at the gambling tables at one of its top casinos.

Net income at the third-largest U.S. hotel company fell to $79 million, or 30 cents a share, from $94 million, or 35 cents, a year earlier. The profit was in line with reduced expectations of 31 cents, the average estimate of analysts polled by First Call Corp.

Beverly Hills-based Hilton warned Sept. 14 that it would make less money than expected in the quarter, as fewer Asians visited the popular San Francisco Hilton and the Hilton Hawaiian Village in Honolulu. At the time, it was expected to earn about 38 cents a share. Hilton shares have fallen about 38% during the last year on expectations of slower profit growth.

"A lot of it has do with the slowing economy and competition [for Hilton's casinos] in Las Vegas," said Bear, Stearns & Co. analyst Jason Ader.

Hilton also is the world's largest casino company. Cash flow--earnings before interest payments, taxes, and depreciation and amortization--at the casinos fell 1% to $151 million. That was partly because of lower winnings at the game tables of its Bally's Park Place casino in Atlantic City, N.J.

Higher debt after $860 million in acquisitions this year also hurt profit, Hilton said.

Revenue rose 1.4% to $1.33 billion from $1.31 billion.

Chief Executive Steve Bollenbach said during a conference call that he still expects Hilton to meet analysts' earnings estimates for the fourth quarter and Hilton's own goals for revenue and cash-flow growth next year.

Hilton also said it's on track to complete its split into separate hotel and casino companies and its $1.2-billion purchase of Grand Casinos Inc.'s three Mississippi resorts by the end of the year. Grand Resorts, based in Minnetonka, Minn., reported a better-than-expected profit for the third quarter.

In New York Stock Exchange trading, Hilton shares rose 6 cents to close at $18.94, and Grand Casinos shares rose 13 cents to $8.44.

At a Glance

* La Jolla-based Agouron Pharmaceuticals Inc. said fiscal first-quarter earnings grew 80% from a year earlier, beating expectations, on growing sales of its Viracept, the best-selling protease inhibitor treatment for AIDS in the U.S.

Net income rose to $6.89 million, or 21 cents a share, from $3.6 million, or 11 cents. Analysts expected 17 cents. Viracept sales rose 68% to $133.9 million from $79.5 million in the same period a year ago.

* Hambrecht & Quist Group said fiscal fourth-quarter profit fell 62% as declines in corporate underwriting outweighed gains in commissions. The San Francisco-based investment bank earned $3.7 million, or 14 cents a share, in the quarter, compared with $9.7 million, or 37 cents a share, in the fourth quarter last year. Analysts expected 19 cents.

* Commerce-based 99 Cents Only Stores reported third-quarter net income for the quarter ended Sept. 30, of $6.7 million, or 34 cents per share, on record net sales of $78 million, compared with net income of $4.8 million, or 25 cents, on sales of $59 million a year ago.

* Carpinteria-based Balance Bar Co. reported third-quarter net income of $1.4 million, or 11 cents per share, on sales of $21.5 million, contrasted with a loss of $189,000, or 2 cents, on sales of $10.1 million, a year ago.

* Pleasanton-based PeopleSoft Inc. said third-quarter earnings rose 54%, in line with analysts' estimates, to $44.2 million, or 17 cents a share, from $28.7 million, or 11 cents, a year earlier. Revenue climbed 62% to $351.3 million from $217.1 million.

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