Hertz Global Holdings Inc. (NYSE: HTZ) watched its shares sink in Monday’s session following a relatively disappointing business update. The company now expects its first-quarter and full-year 2016 U.S. car rental revenue and consolidated first-quarter earnings per share (EPS) to be lower than previously expected.
For the first quarter, Hertz expects U.S. car rental revenue per available car day (RACD) to decline between 2.5% to 3.5% versus the same period last year on low single-digit growth in transaction days. In terms of all of 2016, Hertz expects U.S. RACD total revenue to be flat to 1.5% lower compared to the company’s previous guidance of 1.5% to 2.5% growth year over year.
The company continues to expect modest U.S. RACD transaction day growth in 2016, primarily driven by its on-airport business.
Hertz expects full-year EPS in the range of $0.95 to $1.10 per share, compared to the consensus estimate of $1.05.
John Tague, president and CEO of Hertz, commented:
We are disappointed that the pricing pressure experienced late in 2015 further intensified in the first quarter of 2016. 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.
Shares of Hertz were trading down 6% at $9.11 on Monday, with a consensus analyst price target of $16.44 and a 52-week trading range of $6.95 to $22.63.
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