Hertz Shares Decline After It Cites Weak Rentals, Cuts Full-Year Forecast
A Hertz sign is seen outside a rental car office in Ferndale. Rebecca Cook / Reuters
Although Hertz cities a weaker market, this is also about the Hertz’s fleet-management issues as the car rental giant has grown rapidly through acquisitions.
Hertz Global Holdings Inc. cut its forecast for full-year revenue and profit, citing weaker than anticipated car rentals at U.S. airports.
Sales will probably be $10.8 billion to $10.9 billion, down from a forecast in February of $10.85 billion to $10.95 billion, the company said today in a statement [embedded below].
“Weaker volume impacts not only revenues, but also generates related fleet issues, including lower utilization and the inability of the used car market to absorb our excess vehicles at current market prices,” Chairman and Chief Executive Officer Mark P. Frissora said in the statemnt.
Hertz cut its forecast for adjusted net income to $780 million to $830 million, from an earlier prediction of $830 million to $875 million.
Higher prices at U.S. airports will partially offset a decline in volume, and Hertz will still “generate record earnings for the full year,” Frissora said.
Hertz, based in Park Ridge, New Jersey, bought Dollar Thrifty Automotive Group Inc. last year and competes with closely held Enterprise Holdings Inc. and Avis Budget Group Inc.
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