Shares of Zipcar Inc. (NASDAQ: ZIP) are getting battered today following a less-than-impressive second-quarter showing and a weak forecast for the current quarter. The company also suffered two downgrades this morning, one to Market Underperform at Avondale and the other a cut to Neutral at Cowen.

Rental car competitors Avis Budget Group Inc. (NASDAQ: CAR), Dollar Thrifty Automotive Group Inc. (NYSE: DTG) and Hertz Global Holdings Inc. (NYSE: HTZ) all posted solid earnings, while Zipcar could manage only an net loss of $0.01 versus a consensus break-even estimate.

Worse, Zipcar’s revenue failed to meet expectation,s even though the short-term rental company raised revenues by 15% over the same period a year ago. The company blamed the revenue miss on fewer new memberships and weakness in its U.K. business. The company’s chairman and CEO said:

Moving forward, we are taking actions to maximize returns on our marketing spend, and we will be rolling out initiatives to accelerate adoption and expand our service offerings.

For the full fiscal year, Zipcar expects revenues of $272 million to $278 million, well below the consensus estimate of $290.8 million. The consensus EPS estimate stands at $0.12, but that is not likely to be met. The company forecast third-quarter revenue of $74 million to $77 million, again lower than the consensus estimate of $81.4 million.

Where revenues did rise in the second quarter, the increase was due to new memberships, and the company plans to introduce “new initiatives designed to reignite member growth.” The company should also pay more attention to its costs, which rose twice as fast as its revenues on higher spending for fleet operations and member services.

Shares are down about 35% in mid-morning trading at $6.91, after posting a new 52-week low of $6.50 earlier. The previous 52-week range was $8.87 to $24.45.

Paul Ausick

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