Earnings dip 2.1% at Host Marriott Pilots' strike and Asian woes blamed for downturn

Food services

October 09, 1998|By A Sun Staff Writer

Host Marriott Services yesterday reported a slight drop in third-quarter net income from the third quarter a year ago, which it attributed to the recent Northwest Airlines pilots' strike and the burgeoning economic crisis in Asia.

The Bethesda-based food services company's earnings of $18.5 million, 52 cents a share, in the period ended Sept. 11 represented a 2.1 percent decline from $18.9 million in the corresponding three-month period in 1997.

Revenue in the quarter was $362.2 million, up 6.3 percent from $340.7 million in the year-earlier period.

Host Marriott Services said the slowdown in Asian economies clipped sales in a number of the company's international locations, as well as its duty-free operations in several key gateway airports in the United States. Combined, the Northwest strike and the Asian slowdown dropped earnings per share by 5 cents, the company estimated.

Despite the decline, said Host Marriott Services President and Chief Executive Officer William W. McCarten, "Our long-term fundamentals and growth prospects remain strong."

The company also announced yesterday that it had secured three new food and beverage concession contracts that will generate combined projected annual revenue of about $30 million.

The contracts include a 12-year deal with the Taubman Co. to operate food and beverage concessions in the 1 million-square-foot MacArthur Center in Norfolk, Va.; a 10-year deal with Glimcher Realty Trust for the 1.3 million-square-foot Jersey Gardens Mall in Elizabeth, N.J.; and a 10-year deal with Michael Swerdlow Cos. Inc. for a food court in the 1.4-million-square foot Dolphin Mall in Miami-Dade County, Fla.

Net income for the first three quarters of 1998 increased to $20.8 million, or $0.58 a share, 5.6 percent more than a year ago. Revenue totaled $962.1 million, a 7.0 percent increase. Host Marriott Services operates food, beverage and retail concessions at nearly 200 travel and entertainment venues, and has roughly 24,000 employees in seven countries.

Pub Date: 10/09/98

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