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HILTON REPORTS 17 PERCENT EARNINGS DECLINE FOR SECOND QUARTER

 BEVERLY HILLS, Calif., July 13 /PRNewswire/ -- Hilton Hotels Corp. (NYSE: HLT) today reported net income of $26.8 million, or $.56 per share, for the second quarter ended June 30, a 17 percent decline from $32.4 million, or $.68 per share, for the same period a year ago. Second quarter operating income of $60.2 million was down 3 percent from $61.9 million in the second quarter 1992.
 While operating income for Hilton's two main operating units -- gaming and hotels -- was essentially flat, the net income decline is primarily the result of increased net interest expense of $4.5 million as the company strengthened its capital position in July 1992 by the issuance of $300 million 10-year debentures. This represents the interest on funds allocated, but not yet expended, for several development, expansion and improvement projects.
 Hilton's gaming operations were flat for the second quarter at $37.4 million, compared with $37.5 million for the same period a year ago.
 Gains at the Flamingo Hilton-Las Vegas and the company's two Reno, Nev., hotel-casinos were offset by a decline in operating income at the Las Vegas Hilton, caused by decreased table game volume -- particularly in the important premium play segment. While the Las Vegas Hilton's hold percentages were at normal levels for the quarter, they were below the exceptionally high percentages recorded in the same period in 1992. Nevada occupancy remained strong at 90 percent, up from 89 percent for the similar period a year ago.
 Hotels division operating income for the quarter of $29.7 million was unchanged from 1992's $29.7 million and reflects continued softness in the key New York and Hawaii markets and industry-wide pressure on rates. Occupancy rose slightly to 70 percent, from 69 percent for the second quarter 1992, but average daily rates declined in several major markets, including New York and Hawaii. The company reported encouraging improvements in revenue among airport and suburban properties.
 For the six months, Hilton reported net income of $49.9 million, or $1.04 per share (excluding the cumulative effect of accounting changes equal to $3.4 million, or $.07 per share), down 9 percent from $54.6 million, or $1.14 per share, for the same period in 1992. Operating income for the six months increased 4 percent over the 1992 period, to $114.8 million from $110.4 million.
 Operating income from gaming improved 9 percent to $85.7 million for the six months, from $78.3 million a year ago. In the hotels division, operating income for the six months was down slightly from the same period a year ago at $42.5 million.
 In an effort to begin generating revenue from its new riverboat casinos at the earliest possible date, Hilton during the quarter accelerated plans for the development and construction of its riverboat operations in New Orleans and Kansas City, Mo. An interim New Orleans boat -- to be docked at the New Orleans Hilton -- is now planned for completion in February 1994. The first of two Kansas City vessels is scheduled for a March 1994 opening.
 In addition, Hilton submitted a joint proposal with Caesars World and Circus Circus to develop a land-based casino in Windsor, Ontario, Canada. Immediately following the close of the quarter, Hilton also submitted a proposal for a casino in Athens, Greece.
 "This was a most difficult quarter in that our gaming operations were unable to offset sluggish hotels results as they had in recent periods," said Barron Hilton, chairman and chief executive officer. "We anticipate a challenging remainder of 1993 due to increased room capacity and competition in Las Vegas and a hotel industry that continues its struggle to recover from the recession.
 "However, the consolidation of our domestic and international gaming and hotels businesses is expected to result in an annual cost savings in excess of $6 million and strengthen our unique ability to take advantage of new worldwide gaming opportunities," he said.
 HILTON HOTELS CORP.
 Consolidated Statement of Income
 (In millions, except per share amounts)
 (Unaudited)
 Three months ended Six months ended
 June 30, Percent June 30, Percent
 1993 1992 Change 1993 1992 Change
 Total revenue $345.2 294.8 17 $676.8 571.1 19
 Operating
 income
 Hotels $29.7 29.7 --- $42.5 42.9 -1
 Gaming 37.4 37.5 --- 85.7 78.3 9
 Corporate
 expense (6.9) (5.3) 30 (13.4) (10.8) 24
 Total operating
 income 60.2 61.9 -3 114.8 110.4 4
 Net interest
 expense (17.7) (13.2) 34 (35.9) (27.3) 32
 Provision for
 income taxes (15.7) (16.3) -4 (29.0) (28.5) 2
 Cumulative
 effect of
 accounting
 changes --- --- --- 3.4 --- ---
 Net income $26.8 32.4 -17 $53.3 54.6 -2
 Earnings
 per share:
 Before
 cumulative
 effect of
 accounting
 changes $.56 .68 -18 $1.04 1.14 -9
 Cumulative
 effect of
 accounting
 changes --- --- --- .07 --- ---
 Net income .56 .68 -18 1.11 1.14 -3
 Average number
 of shares 48.0 47.9 48.0 47.9
 Percentage of
 occupancy
 Hotels owned or
 managed 70 69 1 68 65 5
 Gaming (Nevada) 90 89 1 87 86 1
 -0- 7/13/93
 /CONTACT: Marc A. Grossman of Hilton Hotels, 310-205-4545/
 (HLT)


CO: Hilton Hotels Corp. ST: California IN: LEI CNO SU: ERN

JL-LS -- LA003 -- 0742 07/13/93 09:03 EDT
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Date:Jul 13, 1993
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