First in Four Years : Caesars World Posts $4.6-Million Net Loss

Caesars World Inc. recorded a $4.6-million net loss in its fourth quarter ended July 31, as expenses of defending against a hostile takeover campaign brought the casino firm its first red-ink quarter in four years.

At the same time, the Los Angeles company saw its fiscal year’s profit chopped to $33.7 million, which was 17.8% below the previous year’s net profit.

While its operating income improved, pretax earnings were reduced by “unusual” charges of $27.7 million for the fiscal year, of which $22.4 million came in the last quarter. After tax benefits, these items were reduced to $16.8 million and $12.6 million, respectively.

Sosnoff Turned Away

Expenses covered by the charges included those for the $1-billion recapitalization proposal that enabled Caesars to fend off Martin T. Sosnoff as an unwelcome suitor, as well as related financial consulting and legal costs, the firm said.

In addition, the company’s pretax income was adversely affected by an extraordinary loss of $6.7 million in the fourth quarter on early retirement of $130 million of debt securities.

Despite Sosnoff’s dropping of his takeover effort in mid-June, Caesars has not felt the last of the expensive repercussions. It has been stymied by rejection of its recapitalization plan Aug.12 by the New Jersey Casino Control Commission.

The company has a major casino in Atlantic City, as well as Caesars Palace and Caesars Tahoe in Nevada.

Ruling in 2 Weeks

The company asked this week for a rehearing. Securities analysts have said they expect the state authorities to rule on that request in about two weeks. Meanwhile, without giving details, Caesars said it is considering “a variety of alternatives.”

In reporting on its earnings, Caesars said revenues rose to $201.6 million in the fourth quarter compared to $185 million a year earlier. Its 1987 fiscal-year revenue increased to $779.7 million from $688.2 million the prior year.

Henry Gluck, chairman and chief executive, said the results from operations “marks our fourth consecutive year in which we have had solid, improving operating profits.”

He said all three of its hotel-casinos, as well as its four other resort properties, maintained strong performances. He said Caesars Palace was the major contributor, with a 27% increase in operating income over fiscal 1986.