* 1st-quarter adjusted profit $0.21/share vs estimates $0.17
* CEO says Dollar Thrifty performing better than expected
April 29 Car rental company Hertz Global
Holdings Inc 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
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
Online travel agency Expedia Inc 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
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