Hertz Cuts 2016 Outlook on U.S. Car Rental Revenue
April 11 2016 - 9:00AM
Dow Jones News
Hertz Global Holdings Inc. said it anticipates revenue from its
car rental business in the U.S. to be lower than expected in 2016,
as sluggish demand continues to weigh on the company's results.
The company blamed excess industry capacity for its downbeat
outlook, as Chief Executive John Tague on Monday said pricing
pressure in late 2015 had "further intensified" in the first
quarter.
"However, we believe that industry capacity will likely moderate
as seasonal demand improves establishing the foundation for a
relative improvement in pricing as we head into the peak summer
season," Mr. Tague added.
For the first quarter, Hertz said it expects U.S. car rental
revenue per available car day—calculated as total revenues less
revenue from fleet subleases and ancillary revenues associated with
retail car sales, divided by available car days—to decline between
2.5% to 3.5% versus the prior-year quarter. The company also said
it now sees full-year revenue flat to 1.5% lower, compared with its
prior guidance of 1.5% to 2.5% growth.
The company affirmed its Ebitda—or earnings before interest,
taxes, depreciation and amortization—forecast for the year,
projecting a range of $1.6 billion to $1.7 billion. The company
said it expects to earn between 95 cents to $1.10 a share in 2016
on an adjusted basis. Analysts had forecast $1.05, according to
FactSet.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
April 11, 2016 08:45 ET (12:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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