Profit more than doubles on asset sales, tax audit benefit

Thursday, July 28, 2005 | 9:42 a.m.

BEVERLY HILLS, Calif. -- Hilton Hotels Corp. on Wednesday said its second-quarter earnings more than doubled, bolstered by gains related to asset sales and a favorable tax benefit.

The upscale hotel operator reported net income of $202 million, or 49 cents per share, compared with $75 million, or 19 per share, in the year-ago period.

Stripping out nonrecurring items, Hilton reported earnings of $110 million, or 27 cents per share, compared with 18 cents per share a year ago.

Revenue rose 10 percent to $1.18 billion.

The adjusted results topped Wall Street's mean estimate of 24 cents per share from 20 analysts surveyed by Thomson Financial. Revenue was also slightly better than analysts expected.

Revenue per available room, a key measure of financial performance for hotel operators, was up 9.4 percent at Hilton-owned hotels, driven by strength in New York, Hawaii, Boston, and significant improvement in Chicago. Besides the flagship Hilton brand, the company's lodging properties include the Double Tree, Embassy Suites and Hampton brands.

The quarter's results were helped by the sale of a number of hotel properties, which bolstered earnings by 15 cents per share, and a tax benefit from the closure of previous years' tax audits, which added 7 cents per share.

Hilton forecast full-year earnings per share of $1.05 to $1.07 per share, and 82 cents to 84 cents per share excluding one-time items. Full-year revenue is expected to range from $4.44 billion to $4.46 billion.

Analysts' average 2005 earnings forecast is 81 cents per share.

Hilton Hotel shares fell 6 cents to $24.34 in afternoon trading on the New York Stock Exchange.