Marriott Corp. suffered a double whammy from the Persian Gulf war and the recession, causing its first-quarter earnings to plunge.
The Bethesda-based hospitality company reported yesterday that net income fell 64 percent during the 12 weeks that ended March 22 despite its moves in the past six months to boost profitability.
Sales rose 8.5 percent during the most recent reporting period, to $1.8 billion.
Because of poor market conditions, Marriott was not able to sell some hotels, resulting in losses, including financing costs, for a number of new lodging properties.
J. W. Marriott Jr., chairman and president, said in a statement that results for 1991 quarter were constrained by the Persian Gulf war, which significantly reduced travel for much of the period, and the recession.
He said that travel activity and the economy have begun to strengthen in recents weeks, and results for Marriott's lodging businesses and its airport food services and roadside lodging highway operations have improved.
As a hint of better times ahead, Mr. Marriott said, "The decisive actions we have taken over the past six months to boost sales and margins, and to reduce overhead and capital requirements, are beginning to have a positive effect. The impact of these efforts should be increasingly evident once the economy recovers."
"The company cut its capital expenditure program from $1.3 billion in 1990 to under $500 million this year," Robert T. Souers, a company spokesman, said.
Marriott halted all new hotel construction for at least a year. It also laid off about 1,000 workers during 1990 and cut administrative costs by 10 percent.
Lodging sales for the first quarter of 1991 were up 9 percent, while operating income declined 8 percent.
The company had 655 hotels with a total of 153,000 rooms at the end of the quarter.
Three months ended 3/22/91
. . . . . . .Revenue. . . . . . . . Net. . . . . . Share
'91 . . . 1,827,000,000 . . . .10,000,000 . . . .0.10
'90 . . .1,684,000,000 . . . .28,000,000 . . . .0.27
% change . . . . . .+8.5 . . . . . . . 64.3 . . . . 62.9
P. H. Glatfelter Co.
Continuing erosion of prices and demand pushed sales for this Spring Grove, Pa.-based papermaker down nearly 6 percent in the first quarter of the year, the company announced yesterday.
Though profits for the quarter were up nearly 3 percent, a company official warned that the recession was hurting demand just as the company was starting up two new papermaking machines.
Glatfelter Vice President M.A. Johnson II said that "difficult conditions are expected to continue" until the economy rebounds and demand for paper matches the growing supply.
Per-share earnings rose faster than net income because Glatfelter has been buying back its stock.
Three months that ended 3/31/91
. . . . . Revenue . . . . . . Net . . . . Share
'91 . . 149,106,000 . . . .20,525,000. . . 0.90
'90 . .158,507,000 . . . .19,964,000 . . 0.84
% change . . . . 5.9 . . . . . . . +2.8 . . +7.1