Marriott Corp. announced yesterday a fourth-quarter 1990 loss of $54 million, marking the first time in decades the Washington, D.C., company had failed to achieve a quarterly profit.
After covering $88 million in expenses resulting from its two-month-old restructuring, Marriott earnings per share slumped 57 cents into the red for the quarter, compared with a 1-cent-a-share profit in the fourth quarter of 1989.
Though profitable for the full year, Marriott's net income plunged 73 percent, to $47 million, from $177 million for fiscal 1989.
The decline resulted from 1990 write-offs and reserves totaling $97 million. The company had anticipated the charges early this month when it said it would cease new construction of hotels and housing projects for the elderly for the year.
Marriott is also continuing to shed its restaurants, including Bob's Big Boy, Popeye's franchises and Wags family restaurants. In all, restaurant and hotel sales totaled nearly $1 billion, according to company spokesman Robert T. Souers.
Marriott's results for each of the past two years have been muddied with a variety of one-time charges and gains from the sales and write-offs associated with the company's efforts to restructure its operations.
Similarly, without the extraordinary transactions, sales and operating income for the fourth quarter rose 10 percent, while earnings per share increased 6 percent, the company said.
Sales for the year rose 14 percent, to $7.6 billion, excluding all non-recurring transactions.
Sales increased in airport and travel-plaza operations, the company said, but profits were down slightly because of reduced airline and highway travel following the Iraqi invasion of Kuwait and its impact on fuel prices. Senior-living services posted strong sales gains, and start-up losses declined as a result of profit contributions from retirement communities developed by Marriott.
For the past several months, Marriott has been working to strengthen its financial position. The company is slashing its operating budget by cutting back capital spending by $700 million. Marriott also laid off more than 1,000 workers last year and has said an additional 200 workers will be let go this year.
In spite of these moves, operating expenses increased 5 percent during fiscal 1990, excluding the restructuring costs. In addition, the company reported its interest expense rose 5 percent, as well.
On Feb. 1, the company announced that it had secured a $150 million line of credit with Bankers Trust Co., Citibank and Bank of Nova Scotia. Analysts have said that that money gives Marriott added security that it will continue to be able to meet its burdensome debt load, which it racked up with aggressive expansion during the '80s.
In response to the Feb. 1 announcement, Marriott shares had shot up $2.75 after a delayed opening. The stock closed unchanged at $15.385 yesterday.