When I was a boy following my beloved Boston Red Sox, legendary announcer Curt Gowdy often referred to a well-executed double play as a "room service" play. I'm still not certain where the term came from, but it described unusual infield prowess.
Hilton's income for the quarter reached $207 million, compared with $105 million in the same quarter of 2005. Its diluted per-share earnings increased to $0.50, from $0.26 the prior year, a jump of 92%. Its EBITDA was up 78% to $485 million.
In disclosing the company's results, Stephen F. Bollenbach, co-chairman and chief executive officer of Hilton Hotels Corporation, said, "A historic and successful year that began with our acquisition of Hilton International ended with another strong quarter, highlighted by excellent RevPAR (revenue per available room) growth both domestically and internationally, and significant progress in introducing our brands to new markets around the world. We are particularly excited about the agreements we signed with respected partners to develop Hilton Garden Inns and other Hilton Family brands in India and China."
Hilton was the first of the major hotels to report its results for the December quarter. Other pending releases include Marriott International
Revenue for Hilton's final 2006 quarter grew to $2.23 billion, up 106% from the $1.08 billion the prior year. It's owned hotels contributed $683 million in revenues for the quarter, while the leased hotels weighed in with another $731 million, versus just $24 million in the final quarter of 2005. Timeshare and other income was $161 million, while other revenue from managed and franchised properties grew fully 55% to $475 million.
The results for the quarter also benefited from Hilton's $5.7 billion purchase of Hilton International assets in February.
Hilton's North America revenue per available room (that RevPAR thing again, a key metric in measuring hotel earning power) grew by 10.2%. This metric was particularly strong at company-owned hotels in Chicago, New York, San Francisco, and Phoenix. On a worldwide basis, pro forma comparable RevPAR for owned facilities increased 10.7%.
So Hilton's results are moving up like a penthouse elevator. With the room service results of the recent quarter -- along with expectations that the company will add about 255 hotels and 35,000 rooms in 2007 -- my only question is: What's not to like?
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Fool contributor David Lee Smith still loves the Red Sox and doesn't own shares in any of the companies mentioned. He welcomes your questions or comments.