Wednesday morning headlines

Economy surprises experts: The gross domestic product grew at a rate of 3.5 percent in the fourth quarter, despite concerns about the housing slump and disappointing holiday shopping. The experts had expected a 3 percent growth rate. Consumer spending was a big factor for the surprisingly strong showing. This is the snapshot number; the GDP will be revised a couple of more times. AP

Hilton's strong fourth: Speaking of better-than-expected results, Bev Hills-based Hilton Hotels this morning reported fourth-quarter earnings of 39 cents per share, up from 26 cents a year ago. That excludes an 11 cent per share one-time gain. Analysts had expected EPS of 33 cents. Revenue per available room, which is a big deal in the hotel biz, grew 10.2 percent, thanks to strong showings in Chicago, NY, SF and Phoenix. AP

Hotel deal: The Sheraton Universal has been sold for $122 million to Lowe Enterprises, a Brentwood-based real estate investment and development firm. Sheraton stays on as the property's manager, but there are plans for a $20 million upgrade to the 20-story tower. You want to know how hotel valuations have soared? Lowe bought the property from Walton Street Capital and SCS Advisors Inc., which paid less than $50 million for it in 2003. LAT

Hollywood gets bundle: Citicorp is joining up with Bev Hills-based Relativity Media, which helped finance “Talladega Nights: The Ballad of Ricky Bobby,” in a deal to fund at least 45 studio films in the next five years, and possibly as many as 100. Variety said the overall investment could reach $1.1 billion, certainly one of the largest pools of outsider money to reach Hollywood. At least one studio, most likely Sony, is close to finalizing a deal with Relativity in which up to $550 million would be invested in a slate of 40-50 films. To date, Relativity Media says it has structured more than $4.22 billion in production financing for films. And what exactly is Relativity Media? It's the handiwork of 32-year-old Ryan Kavanaugh, who last year raised a $700 million fund with Deutsche Bank for Sony Pictures Entertainment and Universal Studios to make 18 pictures over two years.

Supermarket update: When union officials finally sit down with reps from Ralphs on Monday to discuss a new contract, health care costs will be a prime topic. A study released today by the UC Berkeley Center for Labor Research and Education (interesting timing) finds that only 54 percent of unionized grocery workers had health insurance paid by their employers, down sharply from 94 percent before the 2003 labor dispute. About 29 percent of the new hires qualified for employer-based health insurance, but just 7 percent had enrolled as of September. This is the result of the two-tier wage and benefit system that the union reluctantly agreed to during the last contract talks. LAT

Living wage deal: Looks like the squabble over requiring LAX-area hotels to institute the city's living wage has been resolved. The hotels have agreed to raise the pay for most of its workers, and in return, the city establishes an enterprise zone around the hotels that will provide tax incentives. Mayor Antonio Villaraigosa is expected to announce the compromise, which avoids having to take the issue to voters this spring. Daily News LAT

L.A.'s hot spot: LAT restaurant critic S. Irene Virbila gives three stars to Pizzeria Mozza, the much-anticipated creation of Nancy Silverton (of La Brea Bakery fame) and Mario Batali (the TV celebrity chef who walks around in those silly clogs). Virbila calls it the toughest reservation in town, maybe even the country (there are only 60 seats, so it could take weeks to get in). From the LAT:

Open the door of Pizzeria Mozza, and you'll hear the roar of the crowd happily eating, talking, flirting, with the bass from an old David Bowie album or the Beatles' new Love album thumping in the background. No getting around it, the place is very noisy, and only semi-quiets down well after 10, which incidentally offers the best chance of securing a table on the spur of the moment.

Ranking Disney: The Mouse House finished 13th in the WSJ's annual survey of companies with the best and worst reputations (story is free on WSJ.com.). Last year, Disney ranked 14th. Leadership, financial results and social responsibility are among the areas considered. (Disney was the only local company among the 60 surveyed.) Tops on the list was Microsoft, which beat out Johnson & Johnson. J&J had been No. 1 for seven straight years. From the WSJ:

"The involvement of Bill Gates and his wife in their charitable foundation has had a definite impact on Microsoft's reputation," says Enriqueta Lopez Ramos, a survey respondent and retired university professor in San Benito, Texas. "It's hard to separate Bill Gates's image from that of Microsoft; to me, they're one and the same." Social responsibility, which is becoming an ever more critical component of corporate reputation, contributed to the positive survey results for several other companies, including Whole Foods Market Inc. and Merck & Co. (See an interactive graphic.)

Vista's ho-hum opening: Times have changed in the software world and Tuesday's introduction of Microsoft's long-delayed Windows Vista proved more a whimper than a bang. The vast majority of Vista users will be folks who buy new computers that have the updated operating system already installed. Besides, consider all the bugs that will have to be worked out in the next few months. AP