Hertz Global Holdings Inc. plunged the most in more than four years after cutting its forecast for full-year revenue and profit, citing weaker-than-anticipated car rentals at U.S. airports.
Hertz slid 16 percent to $21.63 at the close in New York, the biggest one-day decline since May 20, 2009. The shares have gained 33 percent this year, compared with a 20 percent rise in the Russell 1000 Index.
Sales will probably be $10.8 billion to $10.9 billion, down from a forecast in February of $10.85 billion to $10.95 billion, the company said today in a statement. Hertz pared its forecast for adjusted profit to $780 million to $830 million, from an earlier prediction of $830 million to $875 million.
Investors “didn’t get any clues” from management the lower forecast was coming, Fred Lowrance, senior research analyst with Avondale Partners LLC in Nashville, Tennessee, said in an e-mail. “Sometimes you can get a sense for it based on company commentary or industry indicators.”
Hertz is charging higher prices at U.S. airports, which is helping make up for the decline in rentals, and the company will still “generate record earnings for the full year,” Chief Executive Officer Mark Frissora said in the statement.
“Weaker volume impacts not only revenues, but also generates related fleet issues, including lower utilization and the inability of the used car market to absorb our excess vehicles at current market prices,” Frissora said.
Hertz, based in Park Ridge, New Jersey, bought Dollar Thrifty Automotive Group Inc. last year and competes with closely held Enterprise Holdings Inc. and Avis Budget Group Inc.
Hertz said yesterday it’s renting Tesla Motors Inc. electric cars at airports in San Francisco and Los Angeles. Rental prices start at about $500 a day, the company said. Hertz has a combined five Teslas at the two locations.