Marriott International posts `healthy results'

But write-off hurts hotel chain's profit

April 14, 2000|By M. William Salganik | M. William Salganik,SUN STAFF

Bethesda-based Marriott International Inc., the country's largest hotel operator, posted yesterday essentially flat earnings for the quarter ended March 24.

Marriott posted earnings of $94 million, or 37 cents a share, after a one-time write-off by its food service division of a contract with Boston Chicken Inc. Without the charge, earnings were $103 million, or 40 cents a share, beating consensus analysts' estimates by a penny.

In the first quarter of 1999, Marriott earned $100 million, or 38 cents a share.

Revenue for the first quarter of this year was $2.17 billion, up 14 percent from $1.9 billion in the year-earlier quarter.

"These are healthy results, and investors should view them positively," said Joyce Minor, an analyst for Lehman Brothers.

"We are on track to meet our new business development goals in 2000," J. W. Marriott Jr., chairman and chief executive officer, said in a statement."In the next few months, we will be opening our 2,000th hotel and our 150th senior living community. For the year, we expect to add 38,000 hotel rooms and time sharing villas to our worldwide lodging portfolio."

For the quarter, Marriott's lodging segment, which generates about 80 percent of company revenue, recorded a 9 percent increase in profit and a 12 percent increase in sales. While occupancy in full-service hotels slipped from 76 percent in the year-earlier period to 75 percent, an average 5 percent increase in room rate yielded an increase of 3.5 percent in revenue per available room, a key measure of the efficiency of the operation.

The senior living segment, which generates about 7 percent of revenue with assisted- and independent-living communities, showed 24 percent sales growth. However, with start-up costs for new communities, profits were flat.

The food service division posted a 22 percent sales gain but showed an operating loss because of the Boston Chicken write-off.

Bloomberg News contributed to this article.

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