Hotel Investors Companies Announce 64% Profit Dip

Hotel Investors Trust and Hotel Investors Corp., a real estate investment trust and hotel management concern, respectively, whose shares trade as one on the New York Stock Exchange, announced a 64% plunge in combined third-quarter profit and slashed their stock’s dividend in half.

The companies said combined earnings fell to $1.39 million, or 11 cents a share, from $3.86 million, or 30 cents a share, a year earlier. However, revenue rose to $25.6 million from $19 million.

For the first 9 months of 1988, the companies’ net income dropped 58% to $3.51 million, or 29 cents a share, from $8.26 million, or 66 cents a share, a year earlier. Nine-month revenue climbed to $67.7 million, from $55.5 million.

The companies blamed the results on several factors, including increased competition and the refurbishment of certain properties, which disrupted business. The properties undergoing changes include the Bourbon Street Hotel & Casino and the King 8 Hotel & Casino, both in Las Vegas.

As a result of the less favorable results, Hotel Investors Trust and Hotel Investors Corp. said their cash flow no longer supports their dividend of 50 cents per share per quarter, which was paid in 1988 and 1987. The firms, which previously indicated they might cut the pay-out, said the next dividend would be 25 cents a share, payable Feb. 1 to stockholders of record Jan. 10.