Hilton Worldwide profit down 57 percent; pulled down by IPO-related charges

Nathan Andrada – Fourth Estate Cooperative Contributor

New York, NY, United States (4E) – Hilton Worldwide posted a 57 percent fall in its earnings for the fourth quarter, as costs tied to its initial public offering (IPO) offset growth in revenue.

The company launched a $2.35bn initial public offering (IPO) in December, making it the biggest IPO by a hotel by proceeds. Hilton’s debut concluded a multiyear reversal and a huge paper profit for private-equity firm Blackstone Group LP, the company’s majority owner. In 2007, Blackstone took control the company for around $25bn in debt and equity.

Revenue jumped 13 percent to $2.64bn, topping analysts’ consensus forecast of $2.46bn. However, the hotelier missed estimates for adjusted per-share earnings of 16 cents.

Expenses jumped 23 percent partially because a rise in general, administrative and other charges due to the conversion into stock of private company share-based compensation in relation with the IPO.

In December, the McLean, Va.-based hotel chain was launched on the New York Stock Exchange, capping a $2.35bn IPO.

Hilton continued to benefit from a rise in business and leisure travel in the final three months of 2013. Average daily rates increased 2.9 percent, and revenue per available room climbed 4.7 percent. System-wide room occupancy advanced 1.2 percent at 68.4 percent.

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