Hertz profit beats on higher pricing
(Reuters) - Car rental company Hertz Global Holdings Inc (HTZ.N) reported a better-than-expected quarterly profit due to higher pricing and strong performance of Dollar Thrifty, which it bought last year.
The car rental industry, tied closely to airline traffic and hotel bookings, is seeing strong volumes, helped by a recovery in business and travel in the United States.
Hertz, which primarily serves corporate customers, is also benefiting from the acquisition of smaller rival Dollar Thrifty - a big player in the leisure and lower-priced rental market.
"Dollar Thrifty is performing better than anticipated, with integration and synergy progress exceeding our targets," Hertz Chief Executive Mark Frissora said in a statement on Monday.
The $2.6 billion acquisition helped Hertz consolidate its position as No. 2 in the U.S. car rental market behind privately held Enterprise Holdings.
Earlier this month, Hertz forecast strong earnings and revenue through 2015 almost entirely due to Dollar Thrifty. It is expecting $300 million in revenue synergies and another $300 million in cost savings from the acquisition.
Hertz posted net income of $18.0 million, or 4 cents per share, in the first quarter, compared with a loss of $56.3 million, or 13 cents per share, a year earlier.
Excluding items, Hertz earned 21 cents per share, above analysts' estimates of 17 cents per share, according to Thomson Reuters I/B/E/S.
Revenue jumped 24 percent to $2.44 billion. Analysts had expected $2.39 billion.
The car rental companies have been doing particularly well in the United States due to their ability to pass on higher rates.
Online travel agency Expedia Inc (EXPE.O) said last week that the recent consolidation in the car rental industry was driving up rental car rates, discouraging its price-sensitive customers from booking through its Hotwire website.
Hertz's revenue per transaction day, an indicator of pricing, increased 4.8 percent in the United States and 1.2 percent overseas during the quarter ended March 31.
The company stood by its full-year profit and revenue targets.
Park Ridge, New Jersey-based Hertz's shares, which have gained about 50 percent this year, closed at $23.97 on Monday on the New York Stock Exchange. They rose to $24.05 in after-hours trading.
(Reporting by A. Ananthalakshmi in Bangalore; Editing by Maju Samuel)
- Hong Kong protesters stockpile supplies, fear fresh police advance |
- Protesters stay out on Hong Kong streets, defying Beijing |
- Stocks head for worst quarter since euro crisis, dollar soars
- U.S. strikes help Iraq Kurds, army advances against Islamic State |
- Special Report: Islamic State uses grain to tighten grip in Iraq