Marriott Corp. is starting to study possible acquisitions, particularly in the restaurant, hotel and amusement park businesses, excutives disclosed yesterday in a briefing for securities analysts.
"We are beginning to look," said President J. W. Marriott Jr., emphasizing that no purchases are anticipated until 1980 or the year after.
"We will have adequate cash flow and definite capacity to expand the business," but no negotiations are currently in progress, he said.
The Marriott president also predicted the corporation's earnings will be "above $1.90 and below $2 per share" for the current fiscal year, which ends in December.
For the first nine months of the year, Marriott earned $53.6 million ($1.44 a share) compared with $40.1 million ($1.05) a year ago.
Profits are running 30 percent ahead of last year but Marriott cautioned that earnings growth could fall below the company's 20 percent-per-year target in 1980 because of what he termed"the Carter recession."
On acquisitions, Marriott said any such targets would be within current lines of business. "We are not going to get into the computer business or anything we can't run ourselves," he added.
In the three-hour session with investment analysts -- a semi-annual affair for Marriott -- executives gave a number of clues about the kind of purchases the Bethesday company is likely to seek.
Richard Marriott, who runs the company's restaurants, noted that five franchised Big Boy restaurants in Nevada were purchased recently and other purchases could help Marriott enlarge its strong, regional fast food and family dining business.
James Durbin, president of the Marriott hotels division, said purchases of properties probably will be one of the techniques used to achieve a new goal of 25 percent per year growth in rooms.
And Robert Schultz, newly-appointed boss ofMarriott's two amusement parks, suggested that buying another park or managing a theme park owned by someone else, could improve the profitability of that operation.
Despite lower attendance at its California park, the division's profits this year are running 39 percent ahead of last year. The potential growth of the theme park business is limited, unless Marriott can acquire another one, he said.
Making major acquisitions would represent a shift in growth strategy for Marriott, which has built its billion-dollar business mostly by expanding the family business that started here 50 years ago.
To date, Mariott's major acquisitions have included the Farrell's restaurants and the Sun Lines cruise ships, both of which have had trouble showing a profit but have improved their performance dramatically in the past year.
The company's ability to turn around those problem profit centers and to shape up the theme parks have added confidence that it can tackle new ventures, Marriott executives indicated.
in a detailed review of the company's current operations, Marriott executives said they have found little impact of what the chief executive called "the Carter recession."
The restaurant business has been hurt, particularly the fast food operations, but mostly outside of the Washington area, reported Richard Marriott. Restaurant profits for the first 10 months of the year are about 7 percent ahead of last year, at $21 million, while sales are up 10 percent to $262 million, he said.
However, the number of people eating in the Roy Rogers and Big Boy chains is off about 7 percent which Marriott estimated is better than the industry average -- a 10 percent loss of sales.
In the Washington area, where Marriott dominates the chain restaurant field, "customer counts are doing quite a bit better" because of the company's strength in the market, he added.