Salomon Sees Quarterly Loss of $30 Million

NEW YORK — Salomon Inc. said Friday that it expects to report a 1991 fourth-quarter loss of about $30 million at a time when most other Wall Street firms are posting stellar earnings.

Salomon said much of the loss was due to a $60-million write-down in the value of oil inventories held by Phibro Energy, a Salomon unit. But Wall Street analysts said the lower-than-expected fourth-quarter results were also because of a lackluster performance by Salomon Bros., the company’s securities brokerage. Salomon said the unit will post only a “modest” fourth-quarter profit, but didn’t give specifics.

Salomon said its overall fourth-quarter loss would reduce its profit for all of 1991 to slightly more than $500 million. The firm’s net profit for 1990 was $303 million. In the 1990 fourth quarter, Salomon had a net loss of $15 million.

Analysts attributed the securities unit’s unexpectedly small profit for the quarter to the effects of Salomon’s Treasury bond scandal, which became public over the summer. Guy Moszkowski, an analyst with Sanford C. Bernstein, said it appears that the unit will have a fourth-quarter profit of about $30 million, about $100 million less than analysts had forecast. But he said the effects of the scandal probably would be temporary.

Investors seemed to take the news in stride. Salomon shares fell $1 to $29.75 on the New York Stock Exchange on Friday.

A Salomon official who requested anonymity said the firm took the unusual step of issuing an earnings estimate more than two weeks before the official numbers are due to warn investors that published projections are too high.

He declined to elaborate on Salomon’s performance but said there had been no increase in the $200 million the firm had set aside earlier to cover expected legal costs associated with the Treasury bidding scandal.