Hertz forecasts strong 2013 as pricing improves

(Reuters) - Hertz Global Holdings Inc reported a quarterly loss due to costs related to its acquisition of Dollar Thrifty, but adjusted profit beat analysts' expectations and the car rental company forecast strong results for 2013 on higher pricing.

Hertz forecast adjusted earnings of $1.82 to $1.92 per share for 2013 on revenue of $10.85 billion to $10.95 billion.

Analysts on average expect earnings of $1.78 per share on revenue of $10.79 billion, according to Thomson Reuters I/B/E/S.

Hertz is off to a "fast start" for the year, Chief Executive Mark Frissora said in a statement.

Car rental revenue per transaction day at U.S. airports rose 6 percent for Hertz and 2.6 percent for Dollar Thrifty in January, Frissora said.

This compares with a 1.6 percent increase for Hertz in December and 4.6 percent for Dollar Thrifty.

The car rental industry, tied closely to airline traffic and hotel bookings, has benefited from recovering business and travel in the United States.

Pricing in the U.S. commercial business, which serves corporate customers at airports, has been under pressure in recent quarters as the major players try to attract more customers by offering lower prices.

To diversify away from airport rentals, Hertz fought a long battle with rival Avis Budget Group Inc over Dollar Thrifty, which serves the leisure car rental market.

After more than two years of first making a public offer, Hertz acquired Dollar Thrifty for $2.6 billion in late 2012 after agreeing to give up 29 Dollar Thrifty airport locations and sell its low-cost Advantage brand.

The acquisition is expected to save the merged company at least $160 million annually and cement Hertz's No. 2 position in the global car rental rankings behind privately held Enterprise Holdings.

Synergies from the acquisition are likely to exceed earlier forecasts, Hertz said on Monday.

Hertz's net loss was $36.4 million, or 9 cents per share, in the fourth quarter, compared with net income of $52.1 million, or 11 cents per share, a year earlier.

Excluding items, Hertz earned 33 cents per share.

Revenue rose 15 percent to $2.3 billion.

Analysts expected earnings of 31 cents per share on revenue of $2.27 billion.

Park Ridge, New Jersey-based Hertz's shares have gained nearly 50 percent since announcing the Dollar Thrifty acquisition in August 2012. The stock closed at $18.73 on Friday on the New York Stock Exchange.

(Reporting by A. Ananthalakshmi in Bangalore; Editing by Supriya Kurane and Roshni Menon)

Source: http://news.yahoo.com/hertz-posts-quarterly-loss-dollar-thrifty-buy-111207475--sector.html

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