Owing to weak volume trends in its largest business segment,
Hertz Global Holdings Inc.
) lowered its outlook for fiscal 2013. Of late, the company's
Hertz brand in the U.S. airport car rental market has been
generating weaker volumes, thereby impacting revenue growth.
Additionally, the deteriorating volumes have resulted in lower
fleet utilization as well as lesser demand for the company's
vehicles in the used car market at existing market prices.
Nevertheless, the weakness in volume trends is offset by strong
pricing trends in the U.S. airport car rental market.
The company now guides revenue for fiscal 2013 in the $10,800.0 -
$10,900.0 million range compared with $10,850.0 - $10,950.0
million guided earlier. Adjusted pre-tax income is now expected
in the range of $1,200.0 - $1,270.0 million against $1,270.0 -
$1,340.0 million projected earlier. However, the company projects
adjusted pre-tax income to increase in excess of 30% on a
Corporate EBITDA is expected to be about $2,120.0 - $2,190.0
million, down from $2,210.0 - $2,270.0 million guided in
February. As a result, the company now forecasts adjusted
earnings per share in the range of $1.68 - $1.78, based on 465
million shares. Earlier, the company had projected adjusted
earnings per share of $1.78 - $1.88 with about 455 million shares
However, the company retained its full-year 2013 projection for
corporate cash flow at $500.0 - $600.0 million.
Though the weak volume trends have pulled down the company's
projections for fiscal 2013, it remains optimistic regarding the
performance of its other business segments including Hertz car
rental off-airport, Dollar Thrifty, Donlen and HERC.
Additionally, the company sees tremendous growth prospects in its
European car rental business, which has witnessed strong trends
throughout 2013, despite the prolonged recession in the market.
Hertz Global currently carries a Zacks Rank #3 (Hold). However,
other stocks performing well in the Business Services sector that
are worth a look include
SouFun Holdings Ltd.
Command Center Inc.
), all of which carry a Zacks Rank #1 (Strong Buy).
CARDTRONICS INC (CATM): Free Stock Analysis
COMMAND CENTER (CCNI): Get Free Report
HERTZ GLBL HLDG (HTZ): Free Stock Analysis
SOUFUN HLDG-ADR (SFUN): Free Stock Analysis
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