Hertz posts loss on cost of buying Dollar Thrifty
Hertz posts 4Q loss on cost of buying rival Dollar Thrifty, but sees profit growing in 2013
PARK RIDGE, N.J. (AP) -- Hertz posted a loss in the fourth quarter because of costs related to buying its rival, Dollar Thrifty. But the rental car company said Monday that pricing improved, volume rose and it cut costs.
The Park Ridge, N.J., company expects further savings from the Dollar Thrifty deal this year. Its outlook for 2013 predicted gains in revenue and profit that topped expectations of Wall Street analysts. Shares rose $1.12, or 6 percent, to $19.85 in premarket trading Monday.
Competition in the car-rental industry had prevented companies from raising prices, which had dragged on revenue. But consolidation means fewer big competitors and a better chance of higher rates.
Hertz Global Holdings Inc.'s loss in the October-December quarter came to $36.4 million, or 9 cents per share, compared with a profit of $47.1 million, or 11 cents per share, at the end of 2011.
Excluding one-time items such as $144.1 million in costs related to the $2.3 billion purchase of Dollar Thrifty, which closed in November years after the original bid, Hertz said its profit came to 33 cents per share. That's up 38 percent from the year before and above the 31 cents predicted by FactSet's poll of analysts.
Revenue rose 15 percent, to $2.32 billion from $2.01 billion, on improved pricing, contributions from Dollar Thrifty and increased volume. Worldwide car rental revenues rose 14 percent to $1.93 billion because the company rented more vehicles for more days, but made less money off of each rental day.
Wall Street expected $2.27 billion in revenue.
For all of 2012, Hertz earned $243.1 million, or 54 cents per share. Its adjusted per-share profit came to $1.33, up from 97 cents in 2011. Revenue rose 9 percent to $9.02 billion.
The company said it's doing better cutting fleet expenses, its largest operating cost, and it expects $300 million in savings from 2013 through 2015 from the Dollar Thrifty deal.
Hertz projected further gains this year: An adjusted 2013 profit of $1.82 to $1.92 per share on $10.85 billion to $10.95 billion in revenue. Analysts expect a profit of $1.73 per share on $10.79 billion in revenue.
