Crown Central Petroleum Corp., beset by losses on its refining operations, is experimenting with another way to make money out of its gas stations: fast food.
The Baltimore-based oil refiner and marketer is negotiating with Taco Bell and Subway sandwich shops to offer fast food at some of its gas stations, Chairman Henry A. Rosenberg Jr. said yesterday.
Crown could use the boost. The company, which lost a total of $51.2 million between 1991 and 1994, reported at yesterday's annual shareholders meeting that it lost $10.2 million more in the first quarter of 1995, down from a profit of $8.7 million in the same period last year. However, sales in the three months that ended March 31 rose 13.2 percent, to $445 million.
Mr. Rosenberg said Crown is suffering from an industrywide squeeze on margins between the price of crude supplies and the price gasoline brings on the wholesale market.
Crown is trying to work its way back to profitability by continuing to cut its expenses. The company, which has shut nearly 400 stations in the last four years, will cut 30 more this year, mostly in South Carolina, Mr. Rosenberg said.
At the same time, however, the company will buy or build as many as 20 new stations in Maryland and Virginia, where profit margins are higher, he said.
And the company will experiment with fast-food offerings, even though a trial with Dunkin' Donuts at some of its stations was "good, but not that great," he said.
Mr. Rosenberg said there are some signs profitability will return soon. Margins widened in April, for example. And improvements to Crown's Texas refineries have increased the percentage of high-profit gasoline the company makes out of each barrel of crude oil.
"Things are great right now," Mr. Rosenberg said. "But it is very day-to-day."
Yesterday's news drew mixed reactions from stockholders and industry observers.
Some investors, who've watched the price of their shares drop by half in the last five years, said they are keeping their faith in the company. The company's "A" shares, which are primarily controlled by Mr. Rosenberg and other members of the Blaustein family, closed at $15.25 yesterday, down 25 cents, on the American Stock Exchange. The "B" shares, which have a 10th of the voting powers of "A" shares, closed at $14.625, down 12.5 cents.