Zipcar sees wider-than-expected loss, shares slide

The Zipcar.com logo is seen on a Mini Cooper car during a promotional event in New York's Times Square April 14, 2011.

(Reuters) - Zipcar Inc (ZIP.O) forecast disappointing first-quarter results, as its new European market faces slower growth, sending the U.S. car-sharing industry leader's shares down more than 16 percent.

The company, which allows customers to rent cars at an hourly or daily rate and often park in convenient reserved spots, has significant presence in UK and is aiming to spread its business throughout Europe.

"When people think about the European growth strategy maybe taking longer to play out in terms of becoming a profit contributor to Zipcar... that has thrown people off a lit bit" analyst Fred Lowrance of Avondale Partners said.

"It is not a very large contributor to the business overall, but it is going to be increasingly important going forward."

The company, which recently purchased a majority stake in Spain's largest car sharing company Avancar, appointed a new president for Zipcar Europe in January.

Since its creation a decade ago, Zipcar has incurred losses every year as it spent heavily to buy cars and expand into newer markets. It is successful in urban areas and colleges, where fewer people can afford owning cars and parking is expensive.

The company expects first-quarter net loss of $4 million to $5 million on revenue of $58 million to $60 million.

Analysts were expecting a net loss of $3.3 million, on revenue of $60.3 million, according to Thomson Reuters I/B/E/S.

Zipcar posted fourth-quarter earnings of 9 cents a share, compared with analysts' estimate of breakeven, helped by strong business in the U.S.

Revenue rose 21 percent to $62.9 million, but missed Street view of $63.1 million.

The company's shares, which have lost half their value since listing in April, fell to $13.50 on Tuesday on the Nasdaq. They were later trading down 13 percent at $14.08.

(Reporting by Megha Mandavia in Bangalore; Editing by Joyjeet Das)