Hilton Hotels Corp., the number three U.S. hotel company, said Monday that fourth-quarter earnings dropped 3 percent from one year ago. Revenue rose 7.3 percent as increased travel fueled higher room rates.

Hilton Hotels Corp. reported earnings of $65 million (16 cents per diluted share) for the fourth quarter ended Dec. 31, compared with $67 million (17 cents per share) for the like-year quarter of 2003.

Excluding special items, Hilton reported a profit of 18 cents a share. The company also bought back 2.3 million shares in the quarter.

Beverly Hills-based Hilton attributed the 3 percent earnings dip to various factors, including a pre-tax loss on asset dispositions totaling $3 million from the December sale of two Doubletree properties near Portland for $29 million, and a pre-tax charge of $5 million related to the write-down of an asset to its estimated fair value.

In the fourth quarter 2004, Hilton said it added 27 properties and 4,017 rooms to its system, and removed 12 hotels and 2,133 rooms. By Dec. 31, the company had a total of 2,259 properties and 358,408 rooms.

For 2005, the company estimated total revenue to be $4.50 billion to $4.53 billion, with diluted earnings per share in the low 70 cent range due to a continuation of strong hotel demand among business and leisure travelers. Hilton also expected to add 130 to 150 hotels and 16,000 to 20,000 rooms to its system.

Shares of Hilton fell 1.6 percent to $22.33 in midmorning trading.