Earnings Reports Brighten Local Business Landscape

Business

April 30, 2004

Earnings reports brighten business landscape

By Matthew Bunk

FAIRFIELD -- Several public companies with operations in Solano County released first-quarter financial results on Wednesday, with jet maker Boeing and Hilton Hotels leading the way on a turnaround in the travel industry.

Anheuser-Busch, which has a brewery in Fairfield, and Vacaville biotech company Large Scale Biology also released quarterly results.

Boeing

Boeing, which occupies an office at Fairfield Corporate Commons and a maintenance facility at Travis Air Force Base, reported unexpected gains in revenue from its military and space division and forecasted a rise in commercial jet sales in 2005.

The No. 2 commercial jet maker reported earnings of $623 million, 77 cents per share, versus a loss of $478 million, 60 cents per share, in the same period last year. The first-quarter 2003 results reflected a charge of $913 million for goodwill impairment.

Boeing's military and space unit now outperforms its commercial jetliner counterpart. Projected for further growth, the military and space unit increased revenue by 18 percent for a first-quarter total of $7.4 billion.

The Chicago-based company's first-quarter revenue hit 13 billion, a 6 percent jump from last year.

Hilton Hotels

A week after three major hotel chains raised outlooks for this year, Hilton Hotels said more business and group travelers contributed to higher-than-expected earnings.

Hilton's income quadrupled to $37 million, 10 cents a share, from $9 million, 2 cents a share, during the same period a year ago.

The Hilton Hotel family includes eight brands, including Hampton Inn and Hilton Garden Inn which have locations in Fairfield.

The Beverly Hills-based company's first-quarter revenue jumped to $994 million from $909 million a year ago. Revenue per available room, a reflection of occupancy and room costs, rose 2.9 percent, Hilton said.

Hilton reported a 5 percent increase in quarterly operating costs associated with rising employee insurance and medical benefits.

Anheuser-Busch

Driven by growth in domestic and international beer sales, Anheuser-Busch reported 13.4 percent earnings growth in the first quarter. The company has a Budweiser plant in Fairfield.

Anheuser-Busch earned $550 million, 66 cents per share, compared to $485 million, 57 cents per share, during the same period a year ago.

It was the world's largest brewing company's 22nd consecutive quarter of double-digit earnings growth, noted Patrick Stokes, Anheuser-Busch president.

Consolidated beer sales increased by 6 percent to $4 billion from $3.8 billion in the same period a year ago, a result of higher revenue per barrel and higher sales volume, the company said. Domestic revenue was up by more than 3 percent due to price hikes and a consumer shift to more expensive Michelob beers, Anheuser-Busch said.

International sales increased most notably in Canada and China, the company said.

Stokes said the St. Louis-based company will issue a quarterly dividend of 22 cents per share.

Large Scale Biology

Large Scale Biology, a Vacaville-based biotech company, reported a first-quarter loss of $4.3 million, or 16 cents per share.

Founded in 1987, Large Scale Biology develops treatments and diagnostic products to identify and treat disease. Its research and development facilities and corporate offices are in Vacaville; the manufacturing plant is in Owensboro, Kentucky.

The company recently reached an agreement with Sigma-Aldrich Corporation to commercially distribute its plant-produced Aprotininª treatment, a product marketed within the life science industry.

Large Scale Biology also has begun researching other treatments, the company said, but it has yet to generate significant revenue from its pharmaceutical products.

It ended the quarter with $11.2 million in cash, and executives said they have been pleased with progress of product development.

"We are convinced (Large Scale Biology) has made significant steps in restoring shareholder value," said Kevin Ryan, Large Scale Biology president and CEO.

Reach Matthew Bunk at 425-4646 Ext. 267 or mbunk@dailyrepublic.net.