Marriott Corp., the world's largest hotel operator, yesterday reported a 57 percent drop in profits in the third quarter. But the Bethesda-based company maintained that the basic health of two key businesses -- hotels and contract services -- was masked by one-time charges and gains.
Marriott said its net earnings in the quarter totaled $27 million, compared with $63 million in the same quarter of 1989. Its per-share profits fell to 27 cents from 56 cents, and revenue declined 2 percent, to $1.66 billion from $1.69 billion.
Last year's revenue and earnings, Marriott said, included family restaurant and airline catering operations that it has since sold, and reflected a quarterly gain on a hotel transaction. This year's earnings were reduced by an error in food service contract billings that Marriott disclosed in August. That led to a $14 million pretax reduction in food service contract billings.
Income from continuing operations fell 48 percent in the third quarter, although Marriott said that it actually rose if "non-comparable items" such as the charge against food service contract billings are excluded.
In the first nine months of the year, Marriott reported a profit of $101 million (99 cents), down 43 percent from a profit of $176 million ($1.56) in the year-ago period. Sales for the first nine months were $5.1 billion, compared with $5 billion last year.
Earlier this week, the hotel chain said it is freezing plans to build hotels and other projects next year to help trim its capital costs to $650 million in 1991. By comparison, the company is spending $1.3 billion on capital programs this year.
Most properties now under construction will be completed in 1991, said J.W. Marriott, chairman and president of the company, said in a prepared statement.
Building hotels is important to Marriott's bottom line because the company derives a considerable part of its profit from building and selling hotels and motels to groups of investors.
"We remain committed to long-term growth in lodging and contract services, based upon our leadership in these businesses," Marriott's statement said. He said the company's core business is strong and that Marriott has sufficient funds and other resources to "deal with uncertainties in our business environment."
Griffith Consumers Co., a major Washington-area gasoline and heating oil distributor, said it reversed a loss in the fiscal year ended June 30, aided by strong gasoline profit margins and acquisitions of heating oil dealers.
The Cheverly-based company reported a profit of $321,100 (13 cents a share), compared with a loss of $710,500 in the previous fiscal year. Its revenue rose 20 percent, to $123.4 million from $102.6 million in the 1989 fiscal year.
Griffith said its motor fuel revenue rose 9 percent with the opening of two company-operated gas stations in Delaware and the addition of five Mobil dealers in Maryland.