LOS ANGELES — Hilton Hotels Corp. said Tuesday that profit fell 93.5 percent during the fourth quarter from a year earlier, citing a severe slowdown in travel after the Sept. 11 terrorist attacks.
The company reported net income of $4 million, or 1 cent a share, in the three months ended Dec. 31, compared with profit of $64 million, or 17 cents a share, a year ago.
“The fourth quarter was a tough one,” said Stephen Bollenbach, president and chief executive, who forecast that sales will continue to decline throughout the current year.
The Beverly Hills-based hotel operator — whose chains include Hampton Inn, Homewood Suites, Embassy Suites and Doubletree — said the impact of Sept. 11 was felt by almost all of its hotels, with those in Washington, D.C., Honolulu and San Francisco taking an extra hard hit.
Net income slightly exceeded expectations. The consensus earnings estimate among analysts surveyed by Thomson Financial/First Call was for a break-even quarter.
Revenue declined 24 percent to $662 million, as the occupancy rate at U.S. owned-or-operated hotels dropped 8.7 percent to 59.7 percent. Hilton also charged 11.5 percent less on room rent, an average $124.64 per room.
“These numbers would have concerned me if you’d told me six months ago. But given the effects of Sept. 11, and the economic decline, these numbers don’t surprise me,” said Todd Jordan, an analyst with Dresdner Kleinwort Wasserstein Securities LLC in New York, who praised the company for paying down debt during the tough quarter.
Bollenbach said he was “reasonably optimistic for this year,” but warned that “a significant recovery may be some months off.”
The company said sales will decline 15 percent to 20 percent in the current quarter and end the year down 1 percent overall. But the declines will likely be offset by a 2 percent to 3 percent rise in revenue per available room, a key measurement for the hotel industry, the company said.
Business travel should pick up in the third or fourth quarter, Bollenbach said. The biggest challenge in the interim will be controlling costs, which are under pressure from rising insurance and health care payments, he said.
Despite weak results, Hilton added 35 new hotels to its franchise system in the fourth quarter. Another 130 properties are in the pipeline, Bollenbach said.
The company also sold its Red Lion chain of 41 hotels to WestCoast Hospitality Corp. during the quarter, for an after-tax gain of approximately $5 million, or 1 cent a share.
For the full year, Hilton posted a profit of $166 million, or 45 cents a share, compared with $272 million in 2000, or 73 cents a share. Revenue declined 12 percent to $3.1 billion from $3.5 billion.