Hilton Revenue Beats Estimate As Occupancy Increases

(Reuters) – Hilton Worldwide Holdings Inc (HLT.N), owner of the Conrad and Waldorf Astoria hotel brands, reported a better-than-expected 7 percent rise in quarterly revenue, as increased business travel in United States drove up occupancy rates.

The increase in travel due to the strengthening U.S. economy has resulted in tight supply of hotel rooms. Hilton gets about three-quarters of its revenue from the United States.

Revenue per available room (RevPAR) increased 6.8 percent at U.S. hotels open for at least a year in the fourth quarter ended Dec. 31, Hilton said.

Worldwide comparable RevPAR rose 6.6 percent. RevPAR, a metric of hotel health, is calculated by multiplying a hotel’s average daily room rate by its occupancy rate.

Revenue rose to $2.83 billion from $2.64 billion a year earlier.

Net income attributable to shareholders rose to $158 million, or 16 cents per share, from $26 million, or 3 cents per share. On an adjusted basis, Hilton earned 17 cents per share.

Analysts on average expected a profit of 18 cents per share on revenue of $2.72 billion, according to Thomson Reuters I/B/E/S.

Hilton’s fourth-quarter 2013 profit was adjusted for $306 million of pre-tax general, administrative and other expense, and $23 million of pre-tax interest expense, offset by a pre-tax gain on debt extinguishment of $229 million and an $87 million income tax benefit.

The company said it expects an adjusted profit of 10-12 cents per share for the first quarter. Analysts were expecting a profit of 15 cents per share.

Rival Starwood Hotels & Resorts Worldwide Inc (HOT.N), owner of the Sheraton and Westin brands, which has nearly half its properties outside North America, blamed a strong dollar for its lower-than-expected full-year profit forecast of $2.87-$2.97 per share.

Hilton’s shares had risen about 10 percent this year up to Tuesday’s close of $28.65 on the New York Stock Exchange, outperforming an about 1 percent rise in the Dow Jones U.S. Travel & Leisure Index <.DJUSCG>.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Joyjeet Das)

© Copyright 2014 Thomson Reuters. All Rights Reserved.

Japan Display In Talks With Apple To Build Iphone Screen Plant: Source

TOKYO (Reuters) – Japan Display Inc <6740.T> is considering building a plant to supply smartphone screens for Apple Inc and is negotiating with the U.S. company for investment in the project, a person familiar with the situation said on Friday.

The Japanese screen maker aims to be the primary supplier of high-tech screens for Apple’s wildly popular iPhones, the person told Reuters. Global iPhone sales, notably in China, have surged to make Apple the most profitable company in history.

Japan Display wants Apple to shoulder much of the expected 200 billion yen ($1.7 billion) investment in the plant, which aims to be in operation next year, the source said on condition of anonymity as the talks remain confidential.

The Japanese company said in a statement that it was constantly pursuing opportunities to strengthen its competitiveness, including building a new plant. “No formal decision has been made regarding any matter that we need to disclose,” it said.

The most likely site for the plant is in Ishikawa, central Japan, the source said. It would have a capacity greater than an existing facility in Mobara, southeast of Tokyo, which makes 50,000 of the 1.5 by 1.85 metre sheets a month for iPhone 6 screens and other uses, he said.

Japan Display Chief Executive Shuichi Otsuka said last year that the company needed a new plant as it was reaching capacity at Mobara.

The company, formed in a government-backed deal in 2012 from the ailing display units of Sony Corp <6758.T>, Toshiba Corp <6502.T> and Hitachi Ltd <6501.T>, has endured a rocky spell since its listing in Tokyo last year.

But Japan Display this month reported a rebound to profit from two quarters of losses, boosted by demand from Apple and Chinese smartphone makers, in stark contrast with Japanese competitor Sharp Corp’s <6753.T> shrinking panel business.

Extra orders from Apple would boost Japan Display in its rivalry with Sharp.

Japan Display’s shares jumped 14 percent in early trade on the latest news before closing up 5.4 percent. Sharp fell 2 percent, while the benchmark Nikkei share index <.N225> rose 0.4 percent.

Apple and Sharp both declined to comment on the reports.

(Additional reporting by Yuka Obayashi and Ritsuko Ando; Writing by William Mallard; Editing by Stephen Coates and Mark Heinrich)

© Copyright 2014 Thomson Reuters. All Rights Reserved.

Valeant To Buy Salix In $10.1 Billion Deal

NEW YORK (Reuters) – Canada’s Valeant Pharmaceuticals International Inc agreed to acquire gastrointestinal drugmaker Salix Pharmaceuticals Ltd in an all-cash deal valued at about $10.1 billion, the two companies said on Sunday.

The deal for Salix, known for its irritable bowel syndrome drug Xifaxan, was approved by the boards of directors of both companies, the companies said in a news release.

The companies said the deal had an enterprise value of $14.5 billion, which would include Salix’s debt and any cash on hand. Valeant will pay $158.00 a share, valuing the all-cash transaction at about $10.1 billion.

The merger is expected to yield more than $500 million in annual cost savings within six months, the release said.

The transaction is expected to close in the second quarter of 2015, and is subject to customary closing conditions and regulatory approval.

The deal is the largest ever for Laval, Quebec-based Valeant, which lost a takeover contest for Allergan Inc last year. The usually acquisitive Valeant slowed its buying pace dramatically while it pursued Allergan, and Chief Executive Michael Pearson said last month that it would focus on buying smaller, private companies in 2015.

Pearson said in the release that Salix, based in Raleigh, North Carolina, was an “ideal strategic fit” for Valeant.

The failure to acquire Botox-maker Allergan led Valeant to reassess its history of growth by acquisition and to target a higher stock price and debt-reduction in the next two to three quarters, people familiar with the matter told Reuters in December.

Valeant said on Sunday it had reduced long-term debt to $15.3 billion at the end of December, from $17.2 billion at the end of 2013.

Valeant also released its fourth-quarter results with the announcement, posting net income of $534.1 million, or $1.56 per diluted share, compared to $125.0 million in the year-earlier period, or 36 cents per diluted share.

Revenue rose to $2.28 billion, up from $2.06 billion in the fourth quarter of 2013.

Valeant said it expects cash earnings of $2.30 per share in this year’s first quarter.

British drugmaker Shire Plc as of last week had taken initial steps to acquire Salix and was working with advisers on a potential offer, according to people familiar with the matter.

Endo International Plc had expressed interest but was rebuffed by Salix, according to a source.

CNBC first reported on Friday that Valeant was close to a deal with Salix.

Sullivan & Cromwell LLP served as Valeant’s legal counsel, and Salix was advised by Cadwalader, Wickersham & Taft LLP.

(Reporting by Herbert Lash; Editing by Frances Kerry and Tom Brown)

© Copyright 2014 Thomson Reuters. All Rights Reserved.

Home Depot Sets $18 Billion Buyback, Profit Beats Estimates

(Reuters) – Home Depot Inc , the world’s No.1 home improvement chain, reported a better-than-expected rise in quarterly same-store sales said it would buy back $18 billion of its shares.

Home Depot’s profit also beat market expectations as an improving job market encouraged Americans to spend more on renovations, helping to send its shares up 3 percent in premarket trading on Tuesday.

The company’s $18 billion share buyback replaces a $17 billion buyback authorized in 2013.

Home Depot’s same-store sales rose 7.9 percent in the fourth quarter ended Feb. 1, beating the average analyst estimate of 5.5 percent, according to research firm Consensus Metrix.

Comparable sales increased 8.9 percent in the United States, where Home Depot has more than 85 percent of its 2,269 stores.

U.S. homebuilders remain upbeat about market conditions, according to a survey by the National Association of Home Builders published last week.

Home Depot’s net income rose 36 percent to $1.38 billion, or $1.05 per share, in the quarter. Excluding items, the company earned $1.00 per share.

Net sales rose 8.3 percent to $19.16 billion.

Analysts on average had expected earnings of 89 cents per share on revenue of $18.7 billion, according to Thomson Reuters I/B/E/S.

Home Depot also raised its quarterly dividend to 59 cents per share from 47.

The company said it expects full-year 2015 earnings of $5.11 to $5.17 per share, after accounting for share buybacks.

Home Depot shares closed at $112.28 on Monday on the New York Stock Exchange.

(Reporting by Nandita Bose and Siddharth Cavale; Editing by Savio D’Souza)

© Copyright 2014 Thomson Reuters. All Rights Reserved.

Target Beats Fourth-Quarter Sales Forecast, Sees First Quarter Growth

(Reuters) – U.S. retailer Target Corp reported a stronger-than-expected jump in same-store sales and profits for the key fourth quarter, helped by its expanding online business, and forecast modest earnings growth in the current quarter.

Target said comparable sales at stores open longer than a year rose 3.8 percent in the November-January quarter. That beat its forecast, unveiled last month when it announced plans to pull out of the Canadian market, for a rise of 3 percent.

Adjusted earnings per share, which excludes items including a massive loss related to the Canada exit, came to $1.50 in the fourth quarter. That was above the $1.43 to $1.47 per share range forecast by the company last month.

The results suggest that Target has moved firmly past a damaging breach of consumer data that hurt sales during the holiday season in 2013 and prompted a change of management last year. The company is now focusing its resources on its U.S. business after the Canada exit, which triggered a pre-tax loss of $5.1 billion in the fourth quarter.

The fourth quarter is the most important for retailers due to the boost in demand for Christmas

In an earnings release CEO Brian Cornell said the company enjoyed strong sales of focus product categories including baby, kids and wellness and that efforts to reduce costs were bearing fruit.

“We’re confident that these efforts will allow us to grow our earnings while returning cash to our shareholders in 2015 and beyond,” Cornell said in the release.

For the current quarter to end-April, Target forecast adjusted earnings per share of $0.95 to $1.05, up from $0.92 in the first quarter of 2014 and compared with the average analyst estimate of $1.04, according to Thomson Reuters I/B/E/S.

Target said it will unveil guidance for the full year at a meeting of analysts on March 3.

(reporting by Nathan Layne)

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