Advertisement
YOU ARE HERE: LAT HomeCollections

Hilton Posts Earnings Drop, Matching Estimates

July 31, 2002|From Times Wire Services

Hilton Hotels Corp. on Tuesday reported lower second-quarter earnings, in line with Wall Street expectations, as the industry's post-Sept. 11 rebound stalled and sluggish demand from business travelers hurt room rates.

The results were better than those of many of Hilton's peers, but the company lowered its outlook for the rest of the year, bringing it more in line with the rest of the struggling hotel industry.

The Beverly Hills-based company, whose brands include Hampton Inn, Homewood Suites and Embassy Suites, said net income in the second quarter fell 12% to $76 million, or 20 cents a share. Revenue fell 5% to $1.04 billion and revenue per available room declined 6.1%.

Several metropolitan markets showed strong or improving occupancy levels, but the San Francisco-San Jose market--still reeling from the meltdown of the technology sector--continued to show weakness.

The performance was better than that of Hilton's biggest rivals, Marriott International Inc. and Starwood Hotels & Resorts Worldwide Inc., analysts said.

"We are in fact seeing the gradual improvement we expected early this year, and things are getting better," Hilton Chief Executive Stephen Bollenbach said in a conference call. "Unfortunately, the improvement is not as fast as we originally anticipated."

Analysts praised the company for controlling expenses and keeping margins up even as room revenue declined.

"The results were OK given the environment we're in," said J. Cogan, a senior research analyst with Banc of America Securities in San Francisco. "They are managing the business well."

Hilton said it now expects third-quarter earnings of about 10 cents a share and full-year 2002 earnings in the low-to-mid-50-cents range, with revenue flat in the third quarter and down 2% to 4% for the year.

Analysts polled by Thomson First Call on average had forecast 17 cents and 62 cents, respectively.

Hilton shares closed up 13 cents at $11.53 on the Big Board.

* Providian Financial Corp., issuer of MasterCard and Visa credit cards, reported profit that beat Wall Street expectations and said it will close three more offices, firing 1,300 employees.

Providian closed its Sacramento facility, which employs 300 people, effective immediately, and said it will shutter offices in Fairfield, Calif., and Salt Lake City, which together employ 1,000 people, by the end of the year.

The company said in May that it would fire 2,600 workers, or about 26% of its work force, by the end of the year as part of an effort to recover from crippling loan losses.

Providian's net income fell 34% to $153.9 million, or 53 cents a share, including several one-time items, but drew praise from analysts as an indication that the company's turnaround plan is progressing more quickly than anticipated. The company said it took a charge of about $37.9 million in the quarter as a result of the office closures.

Excluding that charge and the effect of a loan sale, Providian said it earned 9 cents a share.

Analysts on average were expecting a loss of 1 cent.

Providian shares rose as high as $5 in extended trading on the news, after closing at $3.75, up 11 cents, on Nasdaq.

* Fluor Corp. said profit rose 26% to $43 million, or 54 cents a share, beating analysts' average estimate of 50 cents. The Aliso Viejo-based engineering, construction and consulting firm said revenue grew 14% to $2.5 billion.

* Isis Pharmaceuticals Inc. reported a second-quarter net loss of $21.2 million, or 39 cents a share, compared with a loss of $23.4 million, or 58 cents, a year ago. The Carlsbad-based biotechnology company's revenue climbed 164% to $20.1 million as it attracted several new partners and technology licensees.

* IHOP Corp. said second-quarter net income fell 9% to $9.3 million, or 44 cents a share, on a 2.5% rise in revenue to $84.9 million.

* National R.V. Holdings Inc. reported a second-quarter net loss of $1.4 million, or 14 cents a share, compared with net income of $100,000, or 1 cent, a year ago. The Perris, Calif.-based maker of motor homes and travel trailers said sales rose 8% to $87.5 million.

Advertisement
Los Angeles Times Articles
|
|
|