This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Hilton Gets Downscale Treatment

Updated from 11:31 a.m. EDT

Hilton Hotels (HLT) posted a better-than-expected third quarter Thursday as the cyclical travel recovery continued to barrel along, boosting occupancy and room rates.

However, like rival Starwood Hotels and Resorts (HOT) a day before, Hilton Hotels watched its shares slump on investor disappointment with its 2006 outlook.

Although the Beverly Hills, Calif., company expects still-strong unit revenue growth next year, its earnings outlook fell short of Wall Street's estimates. Shares of Hilton Hotels were falling 68 cents, or 3.4%, to $19.13.

During a conference call, Hilton Hotels executives also declined to provide an update on talks to acquire the hotel business of Britain's Hilton Group PLC, which owns and manages the Hilton brand outside the U.S. The two companies confirmed the discussions earlier this month. Investors are waiting anxiously for details about how a potential deal might dilute their shares or boost Hilton Hotels' debt.

The company said it earned $89 million, or 22 cents a share, in the latest quarter, up 46% from $61 million, or 15 cents a share, a year before. On average, Wall Street analysts expected EPS of 20 cents, according to Thomson First Call.

Revenue totaled $1.10 billion, up 7% from $1.03 billion a year before and slightly ahead of the $1.06 billion analyst consensus.

Hilton Hotels said strong demand from all segments -- business, convention and leisure travelers -- boosted occupancy and room rates. That drove double-digit percentage increases in revenue per available room, a key industry metric also known as revpar, at many of the hotels the company owns. New York City and Hawaii remained Hilton's two strongest markets, while stragglers Chicago and San Francisco continued to improve.

Excluding hotels in hurricane-ravaged New Orleans, revpar at hotels the company owns rose 13.3% year over year. Meanwhile, margins at owned hotels rose 220 basis points to 28.8% in the third quarter from last year.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,919.59 +80.85 0.48%
S&P 500 1,981.60 +9.86 0.50%
NASDAQ 4,527.5140 +19.2020 0.43%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs